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Incubator Bank loses second court battle over SFCG loans.

TOKYO, July 29 Kyodo

The Tokyo District Court on Thursday sided with Aozora Trust Bank in its dispute with the Incubator Bank of Japan, which lost a court battle for the second time in three days over loans sold twice over by collapsed moneylender SFCG Co.

The court ruled that the loans that SFCG transferred to Aozora Trust had been registered in July 2006 before Incubator Bank registered its purchase of the same loans in November 2008. Judge Toshifumi Saiki ordered Incubator Bank to pay Aozora Trust about 4.28 million yen it had received in repayments on the loans.

In a ruling on a similar case Tuesday, the court ordered Incubator Bank to pay 4.36 million yen to Shinsei Trust & Banking Co., saying repayments that Incubator Bank received from borrowers of the SFCG loans in question amounted to an illegal gain.

The court decisions followed the arrests in mid-July of former Incubator Bank Chairman Takeshi Kimura, a former advisor to the Financial Services Agency, and other former executives of the bank on suspicion of obstructing an FSA audit of the bank last year in violation of the Banking Act.
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Publication:Japan Weekly Monitor
Date:Aug 2, 2010
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