OSAKA -- Ogawa Securities Co., burdened with mounting bad loans, will halt operations May 27 and plans to go out of business July 31, the company said May 23.
President Tokuo Nanba told reporters that the firm reported the plans to the Kinki Finance Bureau earlier in the day, following the announcement May 22 by major shareholder Yamaichi Securities Co. that it cannot supply further financial assistance to rebuild the firm. It will be the first collapse of a brokerage since 1980.
"We have come to the conclusion to close the firm because we are having difficulty collecting funds from our debtors and we cannot expect Yamaichi to assist us," Nanba said. He declined to give the exact amount of outstanding funds. Nanba stressed that in the remaining months, he will make efforts to recover the funds and secure new jobs for the firm's employees. The Yamaichi group will assist Ogawa in finding new positions for the workers, which number about 70, he added.
The firm will stop conducting business but its offices will be open to refund securities and clear transaction accounts, he said. He said all deposits will be protected, adding that the brokerage has asked the Compensation Fund for Safe Keeping Securities Inc. to support it when necessary.