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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9797)	11/26/1999 9:20:00 AM
From: JPR	Read Replies (1) \| Respond to of 12475

Mohan: Loan Sharks: Japanese style: 1,2 Kidney Punch ============================================================ I want my pound of flesh ============================================================ Monkey riding on the back of the CROC (crossing the river), who demanded the monkey's kidney for transportation charges, said: I left my kidney on the riverbank. U know the rest of the story. ============================================================ Japanese loan sharks want their money back or else a kidney donation will be considered as payment ============================================================ TOKYO, Nov 26 (Reuters) - Japanese police on Friday launched nationwide raids on the offices of Nichiei Co (OSA:8577), a leading lender to small companies, as part of an investigation into questionable loan collection practices. A police spokesman said investigators raided 14 locations, including the home of Nichiei's president, Kazuo Matsuda, and the firm's Kyoto headquarters building. Nichiei, Japan's largest "shoko" firm specialising in making loans to small businesses, has been under fire since the arrest of a former employee late last month. The man is suspected of pressuring a loan guarantor to sell his body organs to pay off a high-interest loan. Shortly after the raids on Friday, another former Nichiei employee was arrested on suspicion of extortion and violating lending laws, the police spokesman said. The spokesman said the investigation was focusing on whether Nichiei employees and the firm itself had violated lending laws which forbid the use of extortion in recovering loans. "We will continue our investigations to see if the company was systematically involved in illegal practices," he said. A Nichiei spokesman confirmed that police had begun raiding its headquarters in Kyoto, but he said it was not immediately clear whether police were investigating the firm for suspected violations of lending laws. Recent media reports on questionable loan collection methods have put shoko firms under the spotlight. Thousands of small Japanese businesses and individuals use shoko firms as a quick and easy source of funds, but the interest charged on such loans is often high. Earlier this month, top bank regulator Michio Ochi, who is a cabinet minister, said Nichiei's business licence could be revoked or the firm could be ordered to temporarily suspend its business operations. Ochi said an extensive investigation was necessary before the watchdog agency could take such action. Given Friday's arrest, the Financial Supervisory Agency, which operates under Ochi's Financial Revitalisation Commission, is sure to order the business suspension, Jiji news agency reported. The agency will closely monitor the criminal probe while considering what operations to order suspended and for what period, the news agency said, without citing sources. Nichiei President Matsuda was summoned to parliament this month to testify on the allegations of questionable loan collection methods. He denied his company had violated any laws. On the same day, the president of Shohkoh Fund & Co (TOKYO:8597), another major shoko firm, was called to testify in parliament as an unsworn witness. Financial regulators have also started hearings with 13 major domestic and foreign creditor banks about their outstanding loans to the two lenders, Japanese media said. The foreign banks include Citibank, UBS (ZSE:UBSZ.N), Merrill Lynch (NYSE:MER) and ING Bank Nv (AMS:ING). Nichiei shares fell 345 yen or 11.46 percent to 2,665 by Friday midday.