IBJ had role in Sogo fiasco: president

The president of the Industrial Bank of Japan on Thursday admitted his bank had a role in the collapse of department store chain operator Sogo Co.

Masao Nishimura told the House of Representatives Budget Committee that IBJ, Sogo's main bank, was "lax" in examining loans extended to the department store chain "because it believed Japan's economy would continue growing."

Nishimura was summoned, as an unsworn witness, by the committee to discuss Sogo's collapse.

IBJ failed to take necessary measures to prevent Sogo from collapsing as a result of stagnant economic activity and the failure of the Long-Term Credit Bank of Japan, Sogo's second largest creditor bank after IBJ, Nishimura said.

He also said IBJ has begun procedures to seize the personal assets of former Sogo

Chairman Hiroo Mizushima, who personally guaranteed loans worth 11 billion yen.

However, Nishimura added he would not comment on the quality of Mizushima's assets before completion of the procedure.

Sogo and 21 group companies filed with the Tokyo District Court for protection from creditors July 12 under a new law allowing firms facing imminent collapse to jump-start rehabilitation.

Sogo is saddled with debts of some 1.87 trillion yen, one of the largest amounts shouldered by a company seeking court protection from creditors.