TAKEFUJI said it filed for bankruptcy yesterday owing $5.1bn (£3.2bn), making it the biggest Japanese consumer lender to fail since a court ruling in 2006 forced the industry to repay borrowers for excessive interest charges.
Takefuji, which had been considered at risk of failing as it lacked the financial backing of a big Japanese bank, said it had filed with a Tokyo court for protection from creditors, citing interest reimbursements, tighter lending rules and harsh competition.
The lender’s president, Akira Kiyokawa, and executive vice president Takeru Takei, son of the company’s founder Yasuo Takei, resigned following the court filing.
Director Junichi Yoshida, replaces Kiyokawa as Takefuji’s boss.
“We made the decision to file because we were clearly in a situation were we were going to default,” Yoshida said at a press briefing in Tokyo.
“It became clear we could not go on,” he added.
Takefuji and other consumer lenders have struggled to survive after Japanese courts ruled in 2006 that they had charged too much interest and had to repay borrowers.
City A.M. Reporter