TOKYO -- The founding family of Japan's Suruga Bank will sell its entire 13%-plus interest in the lender to big-box electronics retailer Nojima, removing an influence seen as a factor in the scandals that rocked the bank last year.
The 14 billion yen ($129 million) deal will lift Nojima's stake to 18.5%, making it Suruga's largest shareholder. The retailer said in its announcement that it plans to "integrate our existing businesses with financial services to create new services that improve convenience for customers."
The Shizuoka Prefecture-based bank is working to turn itself around after it was found last year to have knowingly extended loans based on falsified documents and drafted sales contracts with inaccurate information to sidestep internal lending rules. The inappropriate loans, including cases that are suspected but not proven, exceeded 1 trillion yen.
Then-Chairman Mitsuyoshi Okano, a member of the founding family who had led the bank since 1985, and other executives resigned to take responsibility for the scandal. Suruga was hit with a partial lending ban by the Financial Services Agency last October.
The proceeds from the share sale will go toward repaying debts owed to the bank by companies linked to the Okano family.
The two sides had clashed over 45 billion yen in delinquent loans, with the bank's management considering such drastic measures as seizing Suruga shares or real estate held by the family. They negotiated a compromise under which these assets would be sold to repay the debt, cutting capital ties between the family and the bank in the process. Suruga had been mostly led by a member of the Okano family since its establishment in 1895.
The family also plans to sell land it owns in central Tokyo, which now houses a Suruga branch, to a major developer.