Nichiei Co., a nonbank moneylender under fire for strong-arm collection practices, has agreed to pay 2.5 million yen to a former loan guarantor it threatened, the victim's lawyers said Thursday.
The Kyoto-based company also promised to apologize to the 63-year-old plaintiff, a resident of Chiba Prefecture, who was told by a former Nichiei employee to sell one of his kidneys to repay loans, according to the lawyers.
Under the compromise authorized by the Chiba District Court, Nichiei also pledged to take steps to prevent extortionate loan-recovery practices.
Last October, the plaintiff, who requested anonymity in media coverage of the case, filed suit seeking 3.75 million yen in damages from Nichiei over its strong-arm loan collection tactics. He became the first person in Japan to sue companies that extend "shoko" loans.
Shoko loans are noncollateral, high-interest loans to small firms that require a guarantee by a third party. Nichiei is the country's biggest shoko lender.
Former Nichiei worker Eisuke Arai, 26, who threatened the plaintiff, was arrested after the man filed suit. Arai received a suspended prison term for attempted extortion in January.
The Chiba man said he was glad that a settlement was reached at an early date, but added that he is still angry with Nichiei.
Nichiei officials declined to comment on the settlement.
Five former Nichiei employees have been arrested on suspicion of using coercive loan-recovery tactics, but public prosecutors have not indicted Nichiei because it has begun taking measures to stop extortionate recovery methods.