Troubled Sanyo Securities Co., which filed in November for application of the Corporate Rehabilitation Law, said Wednesday it was moving toward liquidation amid slim chances it will be bought.
Legal counsels appointed to take charge of the brokerage’s rehabilitation told a news conference that they have so far been unsuccessful in finding any firm, domestic or foreign, willing to take Sanyo. “Given the dramatic changes in the environment and current economic conditions, we have decided to give up our efforts for the present toward a transfer of operations,” they said in a statement.
The legal administrators stressed that while they had not given up completely on the possibility of selling off the brokerage to another party, a change of plan was necessary, given the anxieties of Sanyo employees and creditors.
They said that while negotiations with a foreign firm are still continuing, they decided they would begin closing the brokerage’s existing 40 offices during August, and fire all personnel except for those needed to carry out remaining business.
All deposited assets at Sanyo are fully protected and will be returned to investors, and any offers to purchase individual branches and rehire those working there will also be considered by the legal team, they said.
Over the past eight months, the legal team contacted more than 40 domestic and foreign firms, directly and indirectly, including Mitsui Marine & Fire Insurance, but couldn’t close the deal. “If we continue to search for a potential purchaser, it may not be in the best interests of those involved. Though we are switching (our main strategy) to preparations to liquidate, it does not mean we have completely given up rehabilitation,” said one administrator.
Sanyo buckled under the weight of bad loans being shouldered by a nonbank affiliate and became the first of three major financial failures last November when it moved to seek legal rehabilitation. In its wake came the collapses of Yamaichi Securities Co. and Hokkaido Takushoku Bank.
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