ID :
47186
Tue, 02/24/2009 - 04:18
Auther :
Shortlink :
https://oananews.org//node/47186
The shortlink copeid
Moneylender SFCG goes under with over 300 bil. yen in debts+
TOKYO, Feb. 23 Kyodo - SFCG Co., a Tokyo-based moneylender mainly offering loans to smaller firms, said Monday it has filed for bankruptcy protection with the Tokyo District Court after accumulating debts of more than 300 billion yen in the largest
bankruptcy so far this year.
The company, listed on the Tokyo Stock Exchange and formerly known as Shohkoh
Fund Co., said the court has granted its request under the Civil Rehabilitation
Law to find a sponsor that will oversee its turnaround efforts.
As of the end of October, the company had 338.04 billion yen in debts, it said.
According to credit-research firm Teikoku Databank, its liabilities are the
largest left by a company that has failed this year.
SFCG said in a statement that its business conditions deteriorated after the
2006 legal change that tightened regulations on moneylenders and also because
mortgage-backed loans to smaller firms went sour due to the real estate market
fall.
In addition, the U.S. subprime mortgage meltdown since the summer of 2007 and
the ensuing global financial crisis made it extremely difficult for the company
to obtain operational funds and to pay back its debts.
''The onset of the financial crisis made it impossible for us to raise funds
and even though we called in outstanding loans, it became difficult to stay
solvent,'' said Kenshin Oshima, chairman of the company, at a press conference.
He said he will step down as chairman to take responsibility, waiving
retirement benefits, after he is sure that the company's rehabilitation efforts
are on track.
SFCG said it has yet to repay several tens of billions of yen in interest that
has been overcharged to borrowers under the so-called gray-zone interest
system, which Japan's Supreme Court has invalidated.
''Under the circumstances, it would be difficult to fully reimburse the
borrowers,'' said Shinichiro Abe, a lawyer representing the company.
SFCG will hold a briefing for its creditors Tuesday afternoon in Tokyo.
Following the announcement of the bankruptcy, the TSE said it will delist SFCG
from its First Section on March 24.
Shohkoh Fund was founded in 1978 and once thrived on lending to smaller
businesses.
In 1999, Oshima, who was president at the time, was summoned before a
parliamentary committee regarding allegations that company employees resorted
to coercion in efforts to collect loans.
In 2002, the company renamed itself SFCG.
SFCG saw a consolidated net profit of 6.8 billion yen on 136.4 billion yen in
revenue in the year ended last July. It had a workforce of about 1,620 in July.
==Kyodo
2009-02-23 22:33:53
bankruptcy so far this year.
The company, listed on the Tokyo Stock Exchange and formerly known as Shohkoh
Fund Co., said the court has granted its request under the Civil Rehabilitation
Law to find a sponsor that will oversee its turnaround efforts.
As of the end of October, the company had 338.04 billion yen in debts, it said.
According to credit-research firm Teikoku Databank, its liabilities are the
largest left by a company that has failed this year.
SFCG said in a statement that its business conditions deteriorated after the
2006 legal change that tightened regulations on moneylenders and also because
mortgage-backed loans to smaller firms went sour due to the real estate market
fall.
In addition, the U.S. subprime mortgage meltdown since the summer of 2007 and
the ensuing global financial crisis made it extremely difficult for the company
to obtain operational funds and to pay back its debts.
''The onset of the financial crisis made it impossible for us to raise funds
and even though we called in outstanding loans, it became difficult to stay
solvent,'' said Kenshin Oshima, chairman of the company, at a press conference.
He said he will step down as chairman to take responsibility, waiving
retirement benefits, after he is sure that the company's rehabilitation efforts
are on track.
SFCG said it has yet to repay several tens of billions of yen in interest that
has been overcharged to borrowers under the so-called gray-zone interest
system, which Japan's Supreme Court has invalidated.
''Under the circumstances, it would be difficult to fully reimburse the
borrowers,'' said Shinichiro Abe, a lawyer representing the company.
SFCG will hold a briefing for its creditors Tuesday afternoon in Tokyo.
Following the announcement of the bankruptcy, the TSE said it will delist SFCG
from its First Section on March 24.
Shohkoh Fund was founded in 1978 and once thrived on lending to smaller
businesses.
In 1999, Oshima, who was president at the time, was summoned before a
parliamentary committee regarding allegations that company employees resorted
to coercion in efforts to collect loans.
In 2002, the company renamed itself SFCG.
SFCG saw a consolidated net profit of 6.8 billion yen on 136.4 billion yen in
revenue in the year ended last July. It had a workforce of about 1,620 in July.
==Kyodo
2009-02-23 22:33:53
