Prime Minister Yoshiro Mori instructed his ruling Liberal Democratic Party on Monday to review a bailout plan for ailing department store operator Sogo Co., party officials said.
Mori was quoted as telling Koji Omi, LDP acting secretary general, “I hope the chairman of the (party’s) Policy Research Council will play a key role in considering (the bailout plan) as the people have a keen interest in it.”
The Financial Reconstruction Commission told council members it is thinking of reviewing the scheme.
The FRC on June 30 approved a plan to have the state-run Deposit Insurance Corp. buy 200 billion yen in loans to Sogo from Shinsei Bank, formerly the Long-Term Credit Bank of Japan, with an eye to waiving 97 billion yen of the total.
The store is asking banks to forgive some of its crushing debt load of 1.7 trillion yen.
It prompted 72 other creditors to pledge to forgive 630 billion yen of Sogo’s 1.7 trillion yen in debt, but also sparked a controversy over whether taxpayers’ money should be used to save a private company.