OKYO — Japan's once high-flying consumer credit firm Takefuji Corp. will file for bankruptcy protection with liabilities of five billion dollars, a credit research company said Monday.
Takefuji, which calls itself a "yen shop", is burdened with claims by customers for refunds of excessive interest charges since the Supreme Court in 2006 entitled borrowers to do so, Tokyo Shoko Research said.
Its liabilities total 433.6 billion yen (5.1 billion dollars), it said.
The Tokyo Stock Exchange suspended trading in Takefuji's shares, which are also listed on the London bourse. No immediate comment was available from Takefuji.
Media reports said the company would file with the Tokyo District Court as early as Monday for restructuring under the Corporate Rehabilitation Law.
It will seek a sponsor while reducing debts through cuts in refunds to customers and other measures, the Nikkei economic daily said, while warning liabilities could expand if more customers come forward with claims.
Takefuji, established in 1974, grew quickly to become the nation's top consumer finance company.
Its founder, the late Yasuo Takei, was Japan's top taxpayer in 1993 and the company boasted group operating profit of 425.4 billion yen and outstanding loans of 1,766.6 billion yen in the year to March 2002 at its height.
But Takei was arrested in 2003 for wiretapping a journalist who wrote an article criticising the company's operations and was given a suspended jail term the following year.
Takefuji saw loan demand fall rapidly in recent years and the Lehman shock in 2008 made Takefuji's fund-raising harder, the Nikkei said.
Japan's megabanks have recently purchased troubled consumer credit firms but Takefuji remains independent from them.
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