One rare colourful spot in Japan’s ongoing tale of deepening gloom and doom came on Monday, emerging from the rubble of the latest corporate collapse.
SFCG, a Japanese lender whose creditors include Citigroup, filed for bankruptcy protection, triggering a slump in financial stocks.
The failure of SFCG with debts of $3.6bn – Japan’s biggest bankruptcy filing in debt terms this year – is likely to make financing even more difficult for small and medium firms, one analyst told Reuters. It could even become the “first stage of a second round of the financial crisis,” said Norihito Fujito, general manager at the investment research and information division of Mitsubishi UFJ Securities.
The fate of the company may point to a higher default risk among second-tier non-banks as they face difficulties collecting loans from real estate and smaller firms, said Daiwa SMBC credit analyst Takao Matsuzaka.
Afterall, it was only last year that SFCG posted a group net profit of Y6.85bn for the year ended July. Now, it says, it failed to secure Y7.5bn needed for its February settlement – in a vivid illustration of tightening credit conditions.
A record 33 listed companies went under in Japan in 2008, and SFCG has become the 10th corporate failure this year, as banks tighten their lending policies. But for a relatively small lender among Japan’s titans, SFCG is making more waves than it might be expected to – not least because of its heavy borrowings from foreign banks, including Lehman Brothers. In a court filing, it said it was suffering from unrecoverable losses from property-backed loans to small and mid-sized companies.
But wait. SFCG’s chairman, Kenshin Ohshima, a man not known for excessive modesty, had a passion for chronicling – and clearly dramatising – his company’s rise. A long-running online manga, or cartoon, of Ohshima – and SFCG’s – corporate adventures makes the company’s website more popular than most corporate cyber destinations in Japan.
The manga, entitled “Tian Ma Xing Kong”, is so named because in Chinese (why Chinese?) it means to “vigorously push forward, allowing no distractions – to let your actions and thoughts grow freely”, we are told.
A Chinese artist presented the following words to Ohshima, the manga goes onto say:
In life, I see a fleet horse running swiftly, feeling the wind. But the flying horse which runs through the sky materializes as a man who has made great business achievements. Mr. Kenshin Oshima is a person who exactly fits the term “Tian Ma Xing Kong”
The reader is then offered 22 instalments – including Ohshima’s single-handed effort to face down hostile parliamentarians and a scene where SBC Warburg executives laud him as a better equity salesman than any of their staff. Conspicuously missing, however, is any episode about corporate collapse – as yet.
Related links:
Japan moneylender SFCG fails - Reuters
The adventures of Tian Ma Xing Kong – SFCG website