US STOCKHOLDER SUES SAITAMA BANK

US STOCKHOLDER SUES SAITAMA BANK

A U.S. stockholder filed a lawsuit Monday against Tokyo-based Saitama Bank Ltd. and its directors, claiming the defendants breached their fiduciary duty to stockholders, wasted and mismanaged the bank's assets and conspired to permit and commit illegal transactions.

The lawsuit, filed in the U.S. District Court, Central District of California, by Los Angeles businessman Robert Wang, is believed to be one of the few cases in which a U.S. investor has sought relief against directors of a Japanese bank in U.S. courts.Saitama Bank has offices in Los Angeles, New York, Chicago and Dallas. Its shares are traded on the over-the-counter market.

A spokesman for the bank in Los Angeles said it would have no comment on the lawsuit at this time.

The case is expected to raise some unusual issues about the responsibilities of the directors of Japanese corporations to their international stockholders.

"In light of the recent scandals involving the Japanese stock market, international investors should take a closer look at the rules governing the conduct of corporate directors in Japan and how the laws regulating that conduct are - and in many cases, are not - enforced," Mr. Wang said in a prepared release.

Mr. Wang is president and chairman of Trans Orient Trading Co., an import/export trading company that he owns and operates with his wife. He also is president of Bauku Inc., a real estate company in Eugene, Ore., and is an active investor in the Japanese stock market.

The lawsuit cites an example of the alleged illegal activities of the directors of Saitama Bank. It describes an April 18, 1989, incident in which Mr. Wang says the directors authorized Saitama Bank to purchase 10 million shares in Janome Sewing Machine Industrial Co. at a price that greatly exceeded its actual value.

The stock was purchased from Koshin, a Japanese corporation that is Janome Sewing Machine Industrial Co.'s single largest stockholder, through TOA Finance. The lawsuit states that TOA Finance is associated with, controlled and financed by Saitama Bank.

The suit states that the payment of an inflated purchase price for the shares of Janome Sewing Machine Industrial Co. reduced the assets of Saitama Bank to the detriment of the bank and its shareholders and violated both Japanese and California laws.