Ailing Sanyo Securities Co. acknowledged Oct. 6 that it received 10 billion yen in loans from three banks with which it has close ties but did not say whether the money was emergency assistance to keep the brokerage afloat.A senior Sanyo official said his firm borrowed the money from the Bank of Tokyo Mitsubishi, Daiwa Bank and Nippon Credit Bank, stressing that the additional money would be used as regular funds for its underwriting and other business during the latter half of the current business year. The official maintained that there was no problem regarding Sanyo's financial situation but refused to disclose the terms of the day's loans, which had been discussed among those concerned since mid-September.The loans were "something totally different" from the brokerage's request to the three banks and to Nomura Securities Co. for financial assistance in the form of additional capital, the official said. The second-tier brokerage is continuing discussions with these four institutions on galvanizing its financial base through such means as third-party allocation of new shares.The official explained that Sanyo would need additional liquidity in the upcoming months as its share of underwriting would inevitably rise because the Big Four securities houses -- Nomura, Daiwa, Nikko and Yamaichi -- are suspended from underwriting government bonds pending administrative action for their alleged illegal payoffs.The official also denied media reports that the Finance Ministry had urged the three banks to make the loans. Vice Finance Minister Takeshi Komura told a news conference he would not comment on issues regarding the operations of an individual financial institution, or what specific role the ministry might have played in the matter.Sanyo has been in dire straits since it was forced to take over 80 billion yen in nonperforming assets held by an affiliate nonbank in 1994. The continued sluggishness of the domestic stock market has also hurt, and questions have arisen regarding the future of the brokerage as financial system deregulation approaches.
