AIJ Client Human Holdings Seeks Compensation for Losses as Shares Tumble
By Takahiko Hyuga – Mar 8, 2012 1:42 AM ET
Human Holdings Co. (2415), the school and healthcare company that’s plunged 9 percent since disclosing it was a client of suspended AIJ Investment Advisors Co. (0202964D), pledged to seek compensation for losses from the Japanese asset manager.
Human Holdings is speaking with its lawyers to see if it can claim damages for possible losses on the 330 million yen ($4.1 million) that AIJ managed for the company as of Dec. 31, Yusuke Kawashita, an executive officer, said in an interview.
Japan’s Financial Services Agency suspended AIJ for a month on Feb. 24 while it finds out what happened to the more than $2 billion of assets managed by the firm. The impact on net income from any losses on Human Holdings’ investment won’t exceed 330 million yen, Kawashita said, without specifying an amount or when it would book any charge.
“We find it very regrettable that the reported performance was unrealistic and untrue,” Kawashita said by telephone today. “We are now in discussions on how to legally claim as much compensation as possible.”
Shares of Tokyo-based Human Holdings have fallen for six days since it disclosed its investment with AIJ on Feb. 29, the worst losing streak since Japan’s record earthquake last March. They fell 1.8 percent to 32,900 yen at the trading close today, compared with a 1.6 percent gain in the benchmark Topix Index. The stock reached a 21-month high of 36,300 yen on Feb. 28.
Phone calls to AIJ today reached an automated recording that didn’t take messages.
Investing Since 2002
Human Holdings was founded in 2002 and started investing money through AIJ that year, Kawashita said. The company is one of the few Japanese clients of AIJ that didn’t invest pension assets. All except two of AIJ’s 120 domestic contracts were with pension funds as of Dec. 31, 2010, according to a regulatory filing submitted by the fund manager last March.
In February, Human forecast net income will more than double to 692 million yen for the year ending March 31, on 50.9 billion yen of revenue. The company, which has about 2,000 employees and 15 subsidiaries in Japan and abroad, listed on the Jasdaq exchange in 2004.
Kawashita said Human may pursue legal action once the Securities and Exchange Surveillance Commission, the FSA’s investigative arm, finishes inspecting AIJ.
The regulator may extend its one-month suspension as investigations into the asset manager expand to Hong Kong, two government officials with knowledge of the matter said. Japanese authorities called on their Hong Kong counterparts to help find out what happened to the 185.3 billion yen of assets managed by AIJ and determine any wrongdoing, one of the officials said.
Tokyo-based AIJ told regulators that its assets under management have dwindled to about 24 billion yen, including 4 billion yen in cash and deposits, one of the officials said.
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