The government confirmed Wednesday that it will sell the nationalized Nippon Credit Bank to a Softbank Corp.-led consortium Sept. 1 under the original contract terms, government officials said.

The confirmation was made by Hideyuki Aizawa, chairman of the Financial Reconstruction Commission, during a meeting with Softbank President Masayoshi Son, the officials said.

Aizawa also assured Son that the government will not toughen conditions relating to a loss-coverage clause in the sales contract.

The NCB sale was initially scheduled for Aug. 1 but was postponed for one month due to the uproar over the Sogo fiasco.

The uproar came after the government announced it would use public money to write off at least 97 billion yen in loans it was obliged to buy back from Shinsei bank, which had been known as the Long Term Credit Bank of Japan before it collapsed and was nationalized. Foreign investors purchased the bank earlier this year.

The same clause that required the state-run Deposit Insurance Corp. to buy back Shinsei's loans to Sogo also exists in the sale contract of NCB; it is triggered if the value of loans falls by 20 percent or more within three years of the bank's sale.

The government decided to adhere to the NCB sales contract, signed by the FRC and the Softbank-led group in late June, because it believes that the loss-coverage provision has won understanding from the ruling coalition through deliberations in the extraordinary Diet session that ended this month, the officials said.

With NCB's handover finalized, the FRC is expected to decide Friday on the amount of public funds to be used to cover NCB's capital deficit.

RCC legal action

Resolution and Collection Corp. has initiated legal action to impound the overseas assets of Kabuto Decom Inc., a Hokkaido-based real estate developer that was a major borrower from the failed Hokkaido Takushoku Bank, sources said Wednesday.

The assets in question include a resort hotel and golf course in the United States currently owned by a Kabuto Decom subsidiary. The total market value for the assets is roughly 15 billion yen, the sources said.

It is rare for the RCC, which is charged with reclaiming the loans of failed banks and credit unions, to seize overseas assets. The amount of the non-Japanese Kabuto Decom assets involved is also the largest lump sum it has moved to impound, according to the sources.

RCC has already submitted requests to courts in both Japan and the U.S. to seize the rights to the assets, they said.

Some 400 billion yen in loans to the Kabuto Decom group were transferred to the RCC after the collapse of Hokkaido Takushoku, but the loan collector had been looking into tips that the developer had overseas assets.

The Kabuto Decom side had formed a complex management structure under which the operations of its U.S. subsidiary were entrusted to a third party, the sources said.

Hokkaido Takushoku, known as Takugin, was the largest bank in Hokkaido, and was grouped as one of the nation's 20 top banks. However, excessive lending during the bubble economy years led to a surge in sour loans, and the bank collapsed in the autumn of 1997.