On March 27, the Securities and Exchange Surveillance Commission recommended the Financial Services Agency to issue a payment order of surcharge to two corporations and seven individual persons on the ground that there was an insider trade before the announcement of TOB by prior information from an officer of Taiyo Nippon Sanso (TNSC) officer in connection with the Mitsubishi Chemical’s TOB of TNSC’s stocks last year.

The Financial Services Agency will deliberate the detail of recommendation from now on in order to decide as to issuance of payment order and so on. Responding to the recommendation, TNSC organized a third-party committee consisting of three lawyers to proceed with research and verification as to the management of information related to the trade. The third-party committee is planning to make out its report toward the end of April of this year, and probe into the truth is awaited about the suspicion of insider trade.　　

According to the Commission, the surcharge payment order has been applied to ten persons including two corporations at this time. The two corporations and seven individuals bought the stocks of TNSC and one of these two corporations is said to have bought the stocks of Mitsubishi Chemical Holdings. The names of applicable individuals and corporations have not been disclosed to public. The suspicion refers to the purchase of the stocks of TNSC or Mitsubishi Chemical Holdings before 15:00 o’clock on May 13, 2014 when the TOB was announced to the public. The data announced by the committee tells that the insider purchase was made on May 8, 9 and 13.
　
The surcharge is calculated deducting the purchased amount from the highest market price multiplied by the number of stocks acquired for a period of two weeks from the announcement of TOB, which corresponds to the profit gained substantially. The surcharge imposed on each respondent of the payment order amounts totally to JPY19.48 million ranging between JP6.25 million and JPY200,000. For reference, the highest price of TNSC stock was then at JPY917 and Mitsubishi Chemical Holdings at JPY427. Recommended by the Securities and Exchange Surveillance Commission, the Financial Services Agency is to go ahead with a trial proceeding and deliberations will be implemented by administrative judges. After the statement of opinion by the respondent and hearing, deliberations will be finalized, and it follows that the surcharge payment order will be issued by the Prime Minister based on the proposal for decision. Should there be any discontent concerning the decision of surcharge payment, it is possible to appeal for cancellation of decision to the court within 30 days.