Creditors of Yamaichi Securities Co. held their last meeting Wednesday, completing bankruptcy procedures for the major brokerage whose collapse in 1997 nearly set off a nationwide financial crisis.
Yamaichi Securities became the first corporate failure in which emergency Bank of Japan loans had to be repaid with taxpayer money.
After the creditors' meeting, Shohei Nozawa, who was Yamaichi president at the time of its failure, told a news conference that it is "very regrettable" that a portion of the central bank loans became irrecoverable.
Nozawa has been head of Century Securities Co., a midsize brokerage, since last June.
In November 1997, Yamaichi opted for voluntary liquidation after huge off-the-book liabilities surfaced. The brokerage had been involved in a practice called "tobashi," which kept losses on securities holdings from being disclosed in financial reports.
After the government judged that the brokerage house's liabilities did not exceed its assets, the central bank extended 1.2 trillion yen in emergency collateral-free loans to Yamaichi in a bid to head off a financial crisis.
However, some 110 billion yen of the loans became irrecoverable, making it necessary for taxpayers to foot the bill.
In the end, creditors got 62 percent of their money back, which exceeded the initially anticipated 50 percent.
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