A former executive of a failed telecommunications firm has been placed on the nationwide wanted list on suspicion of announcing an unrealistic mobile phone service to raise the stock price of its parent company, investigative sources said Saturday.
The Tokyo District Public Prosecutor's Office has obtained an arrest warrant for Takeo Oba, 46, who was general manager of the telecom firm Japan Media Network, on suspicion of violating the Securities and Exchange Law.
Oba is suspected of making about 3 billion yen in profit on the sale of shares in parent firm Ohmori Co., a civil engineering and construction company listed on the Tokyo Stock Exchange's second section, the sources said. He used an investment firm based in the Virgin Islands, a tax haven, for the transaction, they alleged.
According to the sources, Oba, who was virtually running the telecom company, announced in November 2002 the company would start a 4,500 yen per month service in which customers would be guaranteed unlimited mobile phone calls by using a special adapter.
The company went bankrupt in January 2004 without ever launching the service.
After Oba made the announcement, the share price of Tokyo-based Ohmori skyrocketed to 110 yen per share in January 2003 from 40 yen in November 2002.
In parallel, Ohmori issued 200 million equity warrants worth 5 billion yen to the investment firm in the Virgin Islands, which converted most of the warrants into stocks and sold them when the share price was at its height.