Yoji Yamada, president of Nippon Shinpan Co., resigned Tuesday as chairman of the Japan Federation of Consumer Credit Companies to take responsibility for a racketeer-related scandal at his company.
His resignation was later approved at a meeting of the federation's board.
Tetsuro Maekawa, vice chairman of the federation and president of Central Finance Co., was named to replace Yamada.
Nippon Shinpan is popularly known as Nicos.
The scandal left Yamada, who became the federation's chairman in June 2001, with no choice but to resign. On Monday, he also resigned from the board of the Japan Business Federation (Nippon Keidanren).
Eight Nippon Shinpan officials were arrested Saturday on suspicion of giving 28 million yen in cash to a "sokaiya" corporate extortionist between November 1999 and September this year.
Sokaiya extort money from companies by threatening to raise embarrassing questions at shareholders' meetings. They are also known to threaten acts of violence unless they are paid off.
The Commercial Code bans paying off sokaiya, but many major Japanese companies, including Kirin Brewery Co. and Takashimaya Co., have violated the code in the past.
The Japan Federation of Consumer Credit Companies currently has 49 member firms. Its predecessor body was created in 1958.