Oye Kogyo Co., a manufacturer of nuclear power equipment, and its subsidiary Oye Engineering Co. have filed for protection from creditors under the corporate rehabilitation law.
The two companies have combined liabilities of 3.2 billion yen.
Oye Kogyo, listed on the second section of Tokyo Stock Exchange, is the ninth publicly traded company in Japan to go bust this year.
According to papers filed with the Tokyo District Court, Oye Kogyo has liabilities of 3 billion yen and Oye Engineering liabilities of 200 million yen.
Business at Oye Kogyo went downhill after the company was found to be responsible for a water leak at a nuclear fuel storage tank in December.
The tank is in a spent nuclear fuel reprocessing plant now under construction in Rokkasho, Aomori Prefecture.
Established in 1936, the company also builds equipment for chemical, food, medical and environmental plants.
Oye Kogyo President Hiroki Okano held a news conference Thursday at the company's main plant in Hiratsuka, Kanagawa Prefecture, in which he apologized to stockholders and to Aomori residents over the reprocessing plant incident.
The leakage concerned an Oye Kogyo-built steel tank used for the temporary storage of spent nuclear fuel rods. An investigation found a gap in the bottom of the tank that Oye Kogyo engineers filled with pieces of stainless steel welded together.
Fearing they might be exposed, Oye Kogyo engineers smoothed over the surface of the joints. The patch-up job failed to withstand the water pressure, however, with water eventually leaking from the tank.
The incident caused a Rokkasho plant trial run scheduled to start in June to be delayed.
It also exacerbated the problems besetting Oye Kogyo, already struggling amid the flat economy.
The company reported a consolidated loss of 865 million yen in fiscal 2002 for the third straight losing year.
The company says it plans to curtail its nuclear power business and focus its resources on chemical and other industries.
Capitalized at 500 million yen, the Tokyo-based company has 117 employees.
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