Pest-control firm Cats Inc. filed for bankruptcy Monday, saying it failed to obtain lenders’ support after its executives were arrested for allegedly manipulating its share price.
The nation’s second-largest pest-control company had a negative net worth of 686 million yen as of the end of June after suffering from falling sales and booking a loss stemming from a write down of its fully owned U.S. subsidiary.
Cats said it had a liability of 18.64 billion yen as of the end of December.
It said the arrest of its executives did not “directly affect” its decision to apply for fast-track civil rehabilitation with the Tokyo District Court. Instead, it had failed to obtain lenders’ support to turn around the firm on its own.
Cats President Koei Murakami and Hirotaka Otomo, former president and company founder, were arrested earlier this month on suspicion of illegally raising the price of the firm’s shares over two years beginning in August 2000.
Established in 1975, the company is listed on the first section of the Tokyo Stock Exchange. It had sales of 22.98 billion yen and a net profit of 1.01 billion yen for 2002.