Troubled department store operator Sogo Co. has asked its former chairman to hand over more of his personal assets to make reparations for its financial woes, Sogo officials said Tuesday.
Sogo President Kyoichi Yamada made the request in a letter sent Monday to Hiroo Mizushima, Sogo’s former chairman, the officials said.
Mizushima has not yet replied, but Sogo will try to confirm his intentions as soon as possible, they said.
Mizushima’s shares in Sogo and its group companies have already been handed over, but their value was not immediately known.
Mizushima was responsible for expanding Sogo’s store network in Japan and overseas after becoming president in 1962. Sogo put up real estate as collateral for huge bank loans to finance Mizushima’s business strategy.
But the move left Sogo and creditor banks in trouble when real estate prices plunged in the early 1990s, with the burst of the asset-inflated bubble economy.
The Sogo group now owes 1.7 trillion yen and has asked 73 creditor banks to waive approximately 632 billion yen of the total.
The government-backed Deposit Insurance Corp. will forgive 97 billion yen of the 200 billion yen in loans to Sogo that it will buy from Shinsei Bank.
Among the conditions DIC set for forgiving the debt was for Mizushima to hand over more of his personal assets.