Japan's lender Takefuji files for bankruptcy protection

Sep 28, 2010, 13:28 GMT

Tokyo - Japanese lender Takefuji Corp filed for bankruptcy protection Tuesday as the consumer finance firm was burdened by mounting claims by customers for reimbursement of excessive interest charges, the company said.

Takefuji listed 433.61 billion yen (5.16 billion dollars) in its overall debts as of the end of June. However, more than 2 million borrowers have yet to claim reimbursements.

Takefuji, once the nation's biggest lender with outstanding loans of around 1.77 trillion yen as of March 2002, had fallen to fourth largest by March this year with the size of loans shrinking to 589.4 billion yen, Kyodo News reported.

Takefuji's operations have deteriorated since a 2006 Supreme Court ruling invalidated 'grey area' interest charges beyond those defined by the interest rate restriction law, which led to increased claims from borrowers for reimbursement of such charges, Kyodo said.

Takefuji announced Tuesday that company president Akira Kiyokawa and vice president Taketeru Takei, a son of founder Yasuo Takei, had resigned from their posts. Director Junichi Yoshida took over as president.

'We offer our most sincere apology to creditors and those who supported us for causing them so much trouble,' Yoshida said.

The company will also to need to slash its total workforce of some 2,000 people and reduce its network of 540 outlets, including unmanned operations, Kyodo reported.