A Tokyo-based seller of yogurt, dried fruit and other food products went under Monday after attracting tens of thousands of investors by promising future returns if they paid to become "owners" of its products.
Kefir Inc. said the Tokyo District Court has accepted an application by the company and its three units to start bankruptcy proceedings. The four companies together have liabilities of ¥105.3 billion ($949 million), with 33,000 creditors.
The bankruptcy announcement came after the Consumer Affairs Agency warned last Friday of potential massive consumer damage by the Kefir group after receiving more than 1,400 consultations over its businesses over the past year.
Kefir, which started in 1992 as a yogurt-seller, had expanded its business areas over the years to other food products such as maple syrup and dried persimmons. It had been involved in solar and biomass power generation and the development of ultralightweight vehicles in recent years, according to the company website.
The firm sold food products through both mail order and a membership website, and used a system under which a person is asked to pay to become an owner of its food-selling business with the promise of getting the money back with interest a few months later.
But many of its businesses have remained sluggish and a system glitch has led to payment delays, prompting many members to terminate their contracts — which in turn has lead to further deterioration of the businesses, the company said in a statement.
Lawyers have formed a group for those affected, and revealed at a gathering Sunday the group is planning to file a criminal complaint against the Kefir group on suspicion of fraud or violation of the investment law.