Asahi Jitsugyo, a real estate affiliate of Asahi Mutual Life Insurance Co., is in the process of liquidation after racking up liabilities of 18.3 billion yen, Teikoku Databank said Monday.
Tokyo-based Asahi Jitsugyo, capitalized at 600 million yen, has been approved for liquidation by the Tokyo District Court, the credit research company said.
Asahi Jitsugyo, set up by Asahi Mutual Life in 1960 as a wholly owned subsidiary, deals in real estate trading and management and also serves as a life insurance agent.
Asahi Mutual Life currently has about a 10 percent stake in Asahi Jitsugyo.
Asahi Jitsugyo has fallen into negative net worth as real estate-backed loans, which it extended aggressively during the 1980s, have continued to sour.
Asahi Mutual Life said it wanted to liquidate the company as soon as possible because Asahi Jitsugyo will be banned from the real estate rental business beginning in April 2002 due to a revision of the Insurance Business Law.
The liquidation of the affiliate will not affect its earnings results, the insurer said.
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