Agura Bokujo blames Tepco for falling beef prices due to radioactivity; debts near ¥62 billion

Cattle giant files for bankruptcy

Kyodo

Agura Bokujo, a cattle farm business with operations nationwide, has filed for bankruptcy protection, blaming the crisis at the leaking Fukushima No. 1 nuclear power plant, which it says prompted a rise in canceled contracts after radioactive elements were detected in beef, a company executive said Wednesday.

The Tokyo District Court ordered the protection of the Tochigi Prefecture-based firm’s assets Tuesday under the civil rehabilitation law. It had ¥61.99 billion in debts as of the end of March.

Agura Bokujo, established in 1979, runs some 370 farms, mostly through franchising, where a combined 145,000 cattle are raised. It solicits investments in cattle breeding and buys calves from cattle owners.

The executive blamed Tokyo Electric Power Co. for falling beef prices after radioactive cesium was found in beef cattle raised on farms near the Fukushima nuclear plant, which was gutted by the March 11 twin disasters.

Some 70,000 people have invested with Agura Bokujo, which expects ¥400 billion in costs to cover canceled contracts if investors opt for this route.

Agura Bokujo intends to seek compensation from Tepco.

Tochigi-based lawyer Hiroshi Suto organized a group of lawyers Monday to provide legal counsel for affected investors, many of whom are retirees. The lawyer said he has received inquiries from some 70 people whose investments ranged from ¥300,000 to ¥100 million.

A 79-year-old Tokyo man, who invested several million yen in the cattle-rearing plan and received a 5 percent yield in the year of his best investment return, said, “I am worried about how much of my principal, which I had planned to use to pay for living expenses, will be refunded.”

Agura said it plans to rehabilitate its business and continue operating the hotels and restaurants it now runs. It plans to organize meetings with its creditors later this month.

The company also took a beating from outbreaks of foot-and-mouth disease in 2010.

However, a former employee of Agura Bokujo, which received business improvement orders from Miyazaki Prefecture over the foot-and-mouth outbreaks, said management was sloppy at the time.

According to Miyazaki authorities, Agura Bokujo, which operated a farm in the town of Kawaminami that was forced to slaughter about 720 cattle after the outbreak of the disease, was aware of the cows’ abnormal frothing in mid-April of that year but failed to report the matter until prefectural officials investigated the case.

The law stipulates that those cows be given medicine after a vet examines them, but the farm had been giving medicine without a vet’s examination.

“My supervisor tried to hide the fact that symptoms of foot-and-mouth disease were suspected,” another ex-employee said. “I was told by the farm to give medicine (without a vet’s examination), so I did so without having any doubt.”