N’S Takefuji Corp is preparing to file for bankruptcy with $5.2bn (£3.2bn) in debts, making it the biggest consumer lender to fail under the weight of court-ordered interest repayments and tighter lending rules.
Takefuji, which has been considered at risk for failure because it doesn’t have the financial backing of any of Japan’s big banks, is making final preparations to file for bankruptcy protection.
Once Japan’s largest moneylender, Takefuji said it had not decided to file for bankruptcy, but would not comment on whether it was considering such a move.
“It is untrue that we made such a decision as some media have reported,” it said in a statement.
Shares of Takefuji closed untraded yesterday due to a glut of sell orders. Trading in the stock had been suspended by the Tokyo bourse for most of the day due the news.
Analysts have said this highlights a major risk to the industry. A Japanese court in 2006 ruled the lenders had charged too much in interest and ordered them to repay borrowers.