Scandal-hit tycoon quits Takefuji
Arrest 'came like a thunderbolt'
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Takei founded Takefuji in 1966.
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(CNN) -- Embattled Japanese billionaire Yasuo Takei has resigned as chairman of Takefuji Corp, Japan's largest consumer lending firm, over a wire-tapping scandal that has already sent the company's share prices tumbling.
Takei, the 73-year-old founder of Takefuji, was arrested last Tuesday on suspicion of violating the Telecommunications Business Law.
He allegedly ordered employees to bug the phone of 44-year-old freelance journalist Shunsuke Yamaoka, who had written articles critical of Takefuji.
Takei admitted he ordered the wiretapping of a journalist, according to investigative sources quoted by Kyodo news agency Monday.
The offences are alleged to have taken place between December 2000 and February 2001. Last month police raided Takefuji's headquarters in Tokyo and arrested five people.
Since last Tuesday, when Takei was taken into custody, shares in Takefuji have fallen more than 20 percent. They are trading late Monday at 5,130 yen, up 1.18 percent.
Takei is one of Japan's richest men, with a fortune of around $6 billion from the family's 70 percent-plus holding in Takefuji, the company he set up in 1966.
Last Thursday Kyodo reported four former employees of Takefuji were re-arrested in connection with the case.
Takefuji is one of Japan's biggest consumer loan companies, with 1900 offices and a net profit of 95.1 billion yen (about $880 million) for the year to March 2003.
Former Takefuji employee Kazuhiro Nakagawa, 42, who received a suspended prison sentence for attempting to blackmail his former firm, told a court in June that he had handled the wiretapping under orders from Takei, Kyodo reported.
A statement issued by Takefuji last Tuesday said Takei's arrest "has come as a complete surprise to us" and the company was united in wanting to see the "full truth of this matter made clear as soon as possible."
Takefuji President Akira Kiyokawa told a press conference at the time that the arrest ''came like a thunderbolt from a clear sky.''
''We intend to cooperate fully with investigations and hope that the truth will be revealed as soon as possible. I would like to express my deep apologies for causing great concern among shareholders, investors and clients,'' Kiyokawa said.
Japan's highly profitable consumer finance industry has been working to shake off its old image as a loan-sharking business in which interest rates were sky-high and debt defaulters ran the risk of physical harm.
Companies like Takefuji, Promise, Acom and Aiful have adopted bank-like ATMs, smart offices and the latest technology to attract consumers in search of unsecured loans.
Takefuji has been regarded as the leader in overhauling the industry's image.
Takei's second son Taketeru is seen as the most likely successor, after elder son Toshiki quit the business in June 2001 for health reasons.
Kyodo reported that police searched Takefuji's headquarters on November 14 and arrested Nakagawa and Kunio Kotaki, 61, a former Takefuji senior managing director, as well as three employees of a detective agency in connection with the wiretapping.
The incident surfaced in October last year after Yamaoka wrote about the alleged wiretapping in a monthly magazine. Yamaoka filed a criminal complaint with police against Takei in June this year.
In August, Takefuji filed a defamation suit against Yamaoka and the publisher of the magazine seeking 17.5 million yen in compensation.
Yamaoka and the publisher filed a 30 million yen damages suit last month against Takefuji, claiming it invaded their privacy by wiretapping the journalist's telephones, after police arrested Nakagawa and others.
Nakagawa said in court that the company had wiretapped five other journalists and former employees who had criticized it.
