Major Non-Bank Goes Bust

[Mulboyne]

[Mulboyne]

You can read the story of Kenshin Oshima and SFCG in manga form - in English - here. The chapters where he laughs at the financial problems of the banks don't look quite so good today.

[TennoChinko]

Kenshin Oshima isn't really Japanese - he's Korean.

[Mulboyne]

That photograph I posted is a few years old but, even allowing for that, his troubles have really taken a toll if these recent pictures are anything to go by:

Kenshin Oshima isn't really Japanese - he's Korean.

He is very open about that. Bruce Wilpon, who married his daughter, said that Yuki told him she thought her family expected her to marry a Korean-Japanese guy.

[Mulboyne]

Reuters: Failed Japanese lender SFCG says to close down

Japan's SFCG Co Ltd, a failed lender to smaller companies, said on Tuesday it had given up efforts to revive its business and would close down, after reports it had offered to sell loans to multiple buyers. SFCG filed for bankruptcy protection on Feb. 23 with debts of $3.6 billion as tightening credit hits businesses throughout the economy. It had been looking for investors to recapitalise its business. But it said in a statement that the Tokyo District Court on Tuesday had ordered it to stop. SFCG did not cite the reasons for the court ruling but Japanese media have said the lender had offered to sell the same loans to two different institutions, angering creditors. SFCG spokesman Masafumi Kuriu said the company was investigating the media reports. "The court must have found it impossible for us to rebuild the business under the current circumstances," Kuriu said.

[Mulboyne]

Yomiuri: 3 firms told to pay 30 bil. yen to SFCG administrators

The Tokyo District Court has ordered three companies linked to moneylender SFCG Co. to pay 30 billion yen to bankruptcy administrators representing the firm to cover the value of some of the assets believed to have been sold at knockdown prices or handed to them for nothing. The court decision took effect from May 21 and the judgment will be finalized if the three companies do not appeal within a month of receiving the notice. The decision is part of legal proceedings being taken under the Bankruptcy Law to recover the outflow of assets from the Tokyo-based firm, which has collapsed and is currently in bankruptcy proceedings. The bankruptcy administrators for the firm also are to file a lawsuit against former SFCG Chairman and founder Kenshin Oshima, 61, for compensation for financial losses they say resulted from his actions.

According to the bankruptcy administrators, the district court acknowledged that SFCG last October unfairly handed over about 13.68 million of its shares, worth about 3.9 billion yen, at no cost to what is now MAG Net Holdings, Inc. MAG Net was a subsidiary company of SFCG at the time. The Tokyo court also acknowledged SFCG handed over to MAG Net and two other companies assets--including loan claims to the SFCG and life insurance payments for its board members--worth about 25.9 billion yen in January and February. On April 28, the bankruptcy administrators filed a request with the court to block SFCG's asset transfer to the three firms, complaining that the transfers were unfair.

A probe by the bankruptcy administrators discovered that SFCG's assets--with a book value of about 267 billion yen--had been given away or sold at knockdown prices to its subsidiaries and other companies operated by Oshima's relatives since September last year. MAG Net, listed on the Jasdaq exchange, is a holding company that owns nine companies that come under its umbrella group. Oshima's eldest son became MAG president in October.

The court has also now ruled that Oshima is personally bankrupt which will allow receivers to go after his assets. He is appealing the decision.

[Mulboyne]

Mainichi: Former SFCG pres. to lose luxury home in bankruptcy proceedings

The Tokyo District Court has ordered the former president of bankrupt financial firm SFCG to turn his house and a karate dojo over to the bankruptcy administrator, it has been learned. Former president Kenshin Oshima was also ordered not to transfer ownership of his German-made Maybach luxury car -- with a sticker price in the tens of millions of yen -- to a third party as a temporary measure. The court's orders were revealed by the bankruptcy administrator, lawyer Hideo Seto, at a news conference Friday. According to Seto, Oshima's Shibuya area luxury home and the dojo are officially owned by a real estate management company, presided over by his wife. However, SFCG was paying the real estate management firm a large sum to rent the home as a "guest house." The monthly rent paid by the company stood at 15.25 million yen up to September 2008, and jumped to 31.5 million yen from October onwards.

Further, before SFCG declared bankruptcy the company transferred some 267 billion yen in assets to seven companies owned by Oshima's relatives, and the court determined that around 60 billion yen of that is to be turned over to Seto. The court decisions were delivered on May 19 and June 3. "It can be said that the former president (Oshima) was transforming the company into his personal property," said Seto. "I hope to recover as much of the company's assets as possible to distribute them to creditors." Some 71.7 billion yen in damages have been recognized by the Tokyo District Court as stemming from transfers of SFCG assets to Oshima. Oshima's attorney, however, has raised objections to this assessment, and is expected to appeal the decision regarding Oshima's home.

[Mulboyne]

Asahi: Moneylender files for bankruptcy

Lopro Corp., once the nation's largest moneylender for small and midsize businesses, filed for court protection under the Corporate Rehabilitation Law on Monday. The company fell into financial trouble because of the recession and its legal obligation to repay interest payments it had overcharged customers. In the 1990s, Lopro, then known as Nichiei Co., ran more than 200 branches and raked in more than 100 billion yen in revenue. But its forcible collection tactics came under fire in 1999, leading the company to change its name and shrink its network of branches to three. Lopro's liabilities, at 21.8 billion yen as of the end of June, are expected to balloon as more interest repayments will be required.

[Mulboyne]

Ken Oshima has just been arrested. It's alleged he tried to hide around 40 billion yen in SFCG assets by transferring them to companies owned by relatives. Courts have already claimed his personal assets.

Source (Japanese)

[TennoChinko]

So why isn't that pudgy fool Debuto Arnottu championing his cause already? Surely as an ethnic Korean Kenshin Oshima automatically deserves his support and sympathy? Hurry up already!!!

[Mulboyne]

Yomiuri: Ex-chairman of SFCG held over asset ruse / Allegedly hid 42 bil. yen before firm went bust

The former chairman of failed major lender SFCG Co. and three others were arrested Wednesday on suspicion of hiding assets worth 41.8 billion yen before SFCG applied for corporate rehabilitation. Such an illegal transfer of assets is considered to constitute the crime of "fraudulent rehabilitation" under the Corporate Rehabilitation Law. SFCG has been involved in bankruptcy proceedings since April last year. Along with former Chairman Kenshin Oshima, 62, the others arrested were Yoshihiro Oshima, 33, Oshima's son and president of an affiliated firm; Tomohiro Yoshida, 30, an executive of the affiliated company; and Kazutaka Morikawa, 35, an employee of that firm. All four denied the allegation, the Metropolitan Police Department said.

According to the MPD, the four are suspected to have disguised the December 2008 transfer of mortgage-backed loans with a book value of about 41.8 billion yen to a Minoo, Osaka Prefecture-based credit research company, run by a relative of Oshima's, before filing for civil rehabilitation proceedings in February last year. The company was effectively controlled by Oshima, the MPD said. The police also said the four were also arrested on suspicion of aggravated breach of trust as such a transaction also harmed SFCG. In addition, SFCG's court-appointed administrator found the firm transferred another set of loan assets to the same Minoo-based affiliated company in February last year. The MPD is also investigating this incident because these loans were suspected to have been registered with retrogressive dates, and this may have formed the basis for false entries in original electronic notary documents used by SFCG.

The MPD has already searched more than 50 locations in connection with the nontransparent outflow of SFCG assets. To guarantee an adequate execution of the corporate rehabilitation process, the Civil Rehabilitation Law prohibits actions to reduce the debtor's assets or obstruct the rehabilitation procedures. Such attempts are considered illegal and actions of "fraudulent rehabilitation." If a debtor hides assets before the start of a civil rehabilitation process, he or she may be imprisoned up to 10 years or fined up to 10 million yen. The Tokyo District Court decided to start personal bankruptcy procedures on behalf of Oshima in June last year.

SFCG was initially established as Shohkoh Fund and Co. in 1978 and was listed on the First Section of the Tokyo Stock Exchange in 1999. The company specialized as a lender servicing loans to small and midsize companies unable to borrow from commercial banks. Its corporate name was changed in 2002 to SFCG, which stands for Shohkoh Fund Corporate Group. Oshima was summoned to the Diet as a sworn witness in December 1999 when the allegedly forcible tactics used by Shohkoh Fund and similar firms extending so-called shoko (commerce and industry) loans to recover money became a social problem.

The global financial crisis of autumn 2008 devastated the company's business and SFCG filed an application for rehabilitation under the Civil Rehabilitation Law in February 2009, which was accepted. However, the court later judged it would be extremely difficult to rehabilitate the firm and canceled the procedure. In April 2009 the court instead decided to start the firm's bankruptcy process.