The Tokyo District Court on Tuesday declared Minami Securities Co. bankrupt and issued a formal order barring creditors of the small brokerage from seizing its assets.
The declaration came in response to an application filed earlier this month by the Financial Supervisory Agency, which found that Minami, based in Maebashi, Gunma Prefecture, had a negative net worth of 367 million yen.
According to Teikoku Databank, a private credit-research agency, Minami has liabilities totaling 18 billion yen.
The assets of the brokerage are already in the custody of a receiver appointed by the Tokyo court, which issued an injunction against the seizure of Minami's assets when the FSA filed the bankruptcy application on March 6.
FSA examiners found that Minami put only 800 million yen into the custody of trust banks out of 1.2 billion yen in margins that customers deposited with the brokerage.
The 400 million yen difference remains unaccounted for.
The whereabouts of Minami Securities President Koichi Hirata, who is believed to be in possession of entrusted securities worth 3.2 billion yen, is unknown.
Last Friday, the Kanto Local Finance Bureau, a Finance Ministry arm, revoked Minami's business registration.
Exchanges strike deal
The Tokyo Stock Exchange has agreed with the Stock Exchange of Thailand and the Philippine Stock Exchange on mutual cooperation in order to improve efficiency in trading, TSE President Mitsuhide Yamaguchi said Tuesday.
The TSE has already reached a similar deal with the Korean Stock Exchange.
Under the deal, the TSE and the three other exchanges will exchange information on their market surveillance systems with a view to sharing knowhow about maintaining stable markets.