Izuhakone Railway Co. President Teruni Serizawa stepped down Tuesday to take the blame for falsified financial statements that had inflated the number of individual shareholders in the firm.

Hisao Watanabe, a director of the company, assumed the presidency.

Izuhakone, part of the group led by Seibu Railway Co., admitted that about 44,000 shares of the company that were registered under the names of 400 individual investors were actually held by four Seibu group firms, including Seibu Construction Ltd. and Izuhakone Travel Inc.

Kokudo Corp., Seibu Railway's biggest shareholder and owner of the Seibu Lions baseball team, has just been hit by a similar scandal involving Seibu Railway's financial statements. Yoshiaki Tsutsumi resigned as chairman of Kokudo last month.

Izuhakone, whose shares are listed on the Tokyo Stock Exchange's second section, also said Tuesday it has submitted revised financial statements for fiscal 2003 to financial authorities.

The railway said it has lowered the number of individual shareholders to 849 from 1,285 and raised the official total ownership of the top 10 shareholders to 76.49 percent from 74.85 percent.

The number of shares held by Tsutsumi was revised to 600 from 2,000, the company said. No other company executives own Izuhakone shares, the company said.

Izuhakone said the company began making false reports about the number of individual shareholders after its shares were moved in January 1974 to the bourse's monitoring post, due to the low number of shareholders and transaction volume.