OSAKA — Police searched on Friday the offices of an Osaka financial company suspected of improperly collecting at least 3 billion yen loaned by its affiliates to the elderly at illegal interest rates.

Osaka Prefectural Police searched the head office of Swiss Private Fund (SPF) in Kita Ward, Osaka, and about 30 other related offices and companies in seven prefectures in connection with suspected investment law violations, police said.

The firm, which said it is Swiss-based, is believed to have solicited investments by saying it would place the funds in venture firms. Police believe it amassed money from several hundred people throughout Japan between June 2000 and last July.

A large part of the funds were then loaned by its affiliated financial firms to heavily indebted pensioners at interest rates above the legal ceiling, police sources said.

Police are also considering building a fraud case because it suspects SPF did not invest in venture companies, the sources said.

According to the investigation, six clients invested a combined 57 million yen after SPF guaranteed them they would get back the principle and between 5.5 percent and 7 percent in annual interest.

Part of the money was used by the affiliated lenders to extend a combined 8.7 million yen in loans to six pensioners who already had multiple loans.

Under the investment plan offered by SPF, investors are told they will receive a share of profits from business projects they invest in. Businesses are banned from promising a return totaling more than the original principle.

In addition, SPF separately solicited funds to invest in venture firms, promising investors that even if the firms failed, it and its headquarters in Zurich would guarantee the original principle.

SPF said it is an international financial company based in Zurich, but Osaka police have not been able to confirm the existence of its headquarters in Switzerland, the sources said.

Meanwhile, Masaru Wanaka, head of SPF, said he sees no problem in the way the company conducted business.

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