Lenders in Japan are seeking to recover more than $700m after payments firm Zentoshin filed for bankruptcy.
Zentoshin reported total liabilities of about Y115.2bn ($710m) when it submitted its bankruptcy filing to the Osaka District Court last week. This is Japan’s largest corporate bankruptcy of the year, according to a Bloomberg report.
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The collapse has left 63 creditors with claims totalling $709m, the publication added citing Tokyo Shoko Research. Creditors are mainly regional banks and other local lenders.
Kinkisangyou Shinkumi Bank in Osaka is the largest creditor, with about Y22bn owed, according to the report. Other major creditors include Tokyo Star Bank, owned by Taiwan’s CTBC Bank, and Towa Bank, each claiming roughly Y8bn.
Yamaguchi Bank is listed as having lent about Y7.5bn.
Zentoshin operated as a credit card payments processor in Japan. It provided services to small and medium-sized merchants, including restaurants, retailers and bars. The company served about 200,000 shops.
The bankruptcy followed difficulties in securing additional financing after allegations of employee misconduct surfaced two years.
Japan’s Financial Services Agency does not see the collapse as creating broader concerns about the health of financial institutions, according to the report. The regulator is expected to examine whether lenders conducted appropriate due diligence and risk management before making loans to Zentoshin, the Bloomberg report added.
Separately, last month it was reported that Blackstone is considering a sale of SP.LINKS, its Japan-based payments services provider. Second-round bids for the business may be submitted around the middle of this month.
