Prosecutors plan to press charges against a former president of Don Quijote Holdings Co., a Japanese discount retailer now known as Pan Pacific International Holdings Corp., for alleged involvement in insider trading, sources familiar with the matter said Wednesday.

The prosecutors allege the 57-year-old illegally advised a male acquaintance to purchase Don Quijote shares prior to the announcement of a takeover bid for the company by FamilyMart Uny Holdings Co. in 2018 in violation of the Financial Instruments and Exchange Law, the sources said.

File photo taken Feb. 27, 2019, shows a Don Quijote discount store in Tokyo. (Kyodo) ==Kyodo

The former president, whose name has not yet been revealed, has denied the allegation, they said.

Don Quijote shares jumped from the 5,000 yen level to the upper 6,000 yen level after FamilyMart Uny Holdings, now FamilyMart Co., announced on Oct. 11, 2018, that it would make Don Quijote an affiliate.

The acquaintance traded stocks prior to the statement and is believed to have gained hefty profits from the tip-off, according to the sources.

The prosecutors were investigating the case in partnership with the Securities and Exchange Surveillance Commission

In a revision to the financial instruments law in 2014, the government banned company executives from leaking information about business deals prior to the formal announcement, as well as advising others to trade stocks.

Upon reports in November that prosecutors questioned the former president, Pan Pacific International Holdings said it will continue to cooperate in the investigation.