Japanese debt collectors seeking to recover 43 billion yen (S$570 million) in housing loan debts have applied to seize funds placed in several banks here, traced to a Japanese company director who guaranteed the loans.
The Resolution and Collection Corporation (RCC), a government- owned subsidiary of the Deposit Insurance Corporation of Japan, which deals with salvaging bad loans from failed housing companies, among other things, obtained a court order here in March to freeze bank deposits placed in Singapore.
The sum is being sought against a single person, Japanese company director Masahiko Nishiyama, 70.
The debts arose from 13 groups of loan and quasi-loan agreements made between RCC's predecessor and Japanese company Pexim between 1989 and 1992 that were underwritten by Nishiyama, according to court documents filed.
Kyoto-based Nishiyama was director of Pexim from 1971 to 2003, and held some 16,850 shares in the company worth 16.85 million yen. He also served as president and chief financial officer for Pexim Inc Hawaii.
Pexim was dissolved in 2004 and a Kyoto district court in 2012 ordered Nishiyama together with Pexim to pay the outstanding loans which, with interest, stood at over 43 billion yen in February this year.
It emerged that Nishiyama had dissipated his assets on a massive scale. Criminal proceedings were brought against him in Kyoto where he was convicted this year and imprisoned. Documents seized by the authorities showed he had stashed substantial sums abroad, including Standard Chartered Bank, Bank Julius Baer and Credit Suisse accounts in Singapore as well as other accounts in Hong Kong and Canada.
In February, a Japanese court issued a worldwide freeze order against his assets. RCC, represented by lawyer Daniel Lim from Joyce A. Tan & Partners, successfully applied the following month for a similar freeze by the Singapore High Court.
Nishiyama was made a bankrupt in March by a Japanese court, which appointed Mr Hiroshi Morimoto as his trustee-in-bankruptcy, whose task is to administer all assets seized. Mr Morimoto, represented by lawyer Eugene Thuraisingam, has been added to the Singapore proceedings and his entry is understood to raise the novel issue of whether a Singapore court is prepared to recognise a trustee-in-bankruptcy appointed in an overseas jurisdiction and clarify his powers.
The next High Court pre-trial conference is due next month.
The case comes in the wake of a first-ever Judicial Insolvency Network conference that ended on Tuesday where more than a dozen insolvency judges from here and abroad sought to work out draft guidelines for dealing with cross- border insolvencies. This is to achieve consistency in judgments delivered in individual countries.