The Cerberus Group, a private U.S. equity fund that has already made an offer to buy the collapsed retail chain Nagasakiya, may also be interested in the failed department store chain Sogo Co.

That was the indication Monday when the president of the Industrial Bank of Japan refused to rule out the possibility of selling Sogo to Cerberus.

Masao Nishimura was replying to a question at a meeting of the House of Representatives Finance Committee, called to discuss Sogo's failure and the government's handling of the situation. The IBJ is Sogo's biggest creditor.

Asked about speculation that Cerberus is poised to buy Sogo, Nishimura said he has no definite information about the group's intentions.

But he also said it is necessary to support Sogo no matter where its new sponsor comes from.

Nishimura also told the session that the IBJ will urge former Sogo Chairman Hiroo Mizushima to take responsibility for the repayment of some 10 billion yen in loans the bank provided to Sogo that Mizushima had guaranteed. Nishimura indicated that the bank may file an application seeking Mizushima's bankruptcy, if necessary.

The controversial bailout scheme for Sogo attracted harsh criticism from opposition parties during the session.

The session centered on whether it was appropriate for the government to approve the use of public funds to bail out the Osaka-based department store chain, while strong concern was expressed over the possibility that Sogo's case may serve as a bad example to the private sector.

Under the initial bailout plan, which was eventually scrapped, Sogo had planned to rebuild its business by asking its 73 creditors to waive 630 billion yen in loans.

Yoshio Suzuki of the Liberal Party criticized the government's decision to allow the Deposit Insurance Corp., a semigovernmental body, to forgive 97 billion yen of the 200 billion yen in loans to Sogo as part of the original bailout scheme, saying that the decision was shortsighted.

"Repaying debts is a principle of the market economy," Suzuki said. "All small and medium-size companies do that."

The DIC, a banking safety net, agreed with a private-sector consortium -- which bought the defunct Long-Term Credit Bank of Japan -- to buy 200 billion yen in LTCB loans to Sogo.

Kimitaka Kuze, chairman of the Financial Reconstruction Commission, emphasized that the bailout plan was the best option at that time from a viewpoint of minimizing the cost to taxpayers. Kuze repeated that the FRC would be very cautious if it faces a case similar to the Sogo debacle in the future.

Last week, Sogo applied for court-managed rehabilitation after the original, debt-waiver-based reconstruction plan was scrapped due to fierce public criticism. The Sogo group is burdened with 1.87 trillion yen in debts.

Sogo reached the decision after LDP policy affairs chief Shizuka Kamei asked the bank to do so on behalf of the LDP-led coalition.

During the afternoon session, DIC head Noboru Matsuda said his organization will not annul a controversial clause it made in the sale of the LTCB that requires the DIC to buy back loans at book value if the loans fall by more than 20 percent in three years.

Yoshito Sengoku of the Democratic Party of Japan strongly criticized the Cabinet, which reportedly approved the FRC's decision.

Among other issues deliberated during the session was the responsibility of Mizushima, who governed the Sogo group for 38 years, and the issue of the FRC's political independence in handling Sogo's case.