The impact of the failure of Toshoku Ltd. has begun to ripple through a number of banks and other firms who either deal with or hold shares in the medium-size trading company.
Toshoku, which deals mainly in foodstuffs, filed for court protection from its creditors under the Corporate Rehabilitation Law. Its liabilities total some 639.7 billion yen.
On Friday, the key Nikkei stock price average on the Tokyo Stock Exchange registered its third largest single-day point loss this year on increased fears of credit risks following the failure of the trading house. Immediately after it filed for protection, Sakura Bank and Yasuda Trust & Banking Co., two of its major shareholders, said they would write off their bad loans to Toshoku by March 31. Sakura said its outstanding loans to both Toshoku and subsidiary Toshoku Finance total 164.8 billion yen, of which it expects 124 billion yen to be irrecoverable.