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Maruishi Cycle Industries Ltd. is bankrupt because banks have suspended transactions with the firm following its second failure to honor a bill, a private credit research agency said Thursday.

The bicycle maker, founded in 1918, has liabilities totaling some 2.9 billion yen, Teikoku Databank Ltd. said.

Maruishi Cycle has been struggling with sluggish sales due to competition from cheaper imports. In May, it created Maruishi Holdings Co. in a bid to improve its business.

In June, police arrested Yoshio Yagi, who had been fired as president in late May, and he was charged with fraud relating to a dubious capital increase in the firm.

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