by Henry Scott Stokes

I have never met Mr. Yasuo Takei. He is said to be an absolutely foul human being. Notorious as a money-lender — in fact as the founder of Japan’s biggest loan shark outfit — he has consorted with his share of wretches, rogues and charlatans.

His sudden arrest last December — on charges of tapping the phones of one or two journalists and employees of his firm — was greeted with smug satis­faction in many parts of Tokyo. He had an enormously long list of enemies, people who rejoiced to see him shoved into the slammer.

The stories told against him were legion. On the occasion of his mother’s funeral, it was said, he handed out to mourners as gifts intended to mark the occasion, a paltry little package per person containing a watch that cost ¥300 — a time-piece reserved for low-level visitors to the offices of Takefuji, as his money-lending empire is known. So much for Respect for Mother’s Day.

The person on whom he lavished his funds was himself. He constructed a gorgeous villa out in Suginami-ku, it is said. There he received favored employees who were asked to shell out ¥8,000 each for the privilege of staying at the boss’ pad overnight.

The meanness of the rich is a choice theme. Yet before I flounder here in a tide of delight over this lost sheep and his tale of woe, let me hark back to times, not so long ago, when he was the acclaimed king of con­sumer finance in this city.

Right through the vulgar bubble years — the hor­rid 1980s — he was worshipped for his money. His rep­utation held up into the 1990s, so much so that those who met him socially — the same people who now denounce him — were happy to share knowledge of the fact with their friends and neighbors.

Not that many people knew then, or understand now, what he was up to. Why was he bugging journal­ists who wrote about him? What did he fear? So much so that he led the charge in tapping these hapless scribes and analyzing 150 hours of their phone calls at his chairman’s office at Takefuji? Was he in cahoots with the inevitable scar-faced men? Or not?

Well, he has abandoned his chairman’s post — he pleaded guilty to the charges pressed against him — and he has thereby found a way of eroding public inter­est in his case. Yet this is just the time, 1 would say, to ask broader questions. What can we learn from his case that goes beyond the particular?

He was a much bigger money business persona in his time than, for example, the salaried execs who cre­ated today’s mega-banks. He gave a face to his era — one in which “consumer loan companies” (sarakin) came to dominate the landscape, as witness the forest of strident sign-boards outside any busy JR station in the metropolis.

In other words, his rise and fall tells one a bit about the half-century during which he was in business (he is now 74). He and his firm got a start some 40 years ago at a time when Japan was leaping forward, in terms of GNP growth and exports and so on, and was surpass­ing West Germany to emerge as the second largest economy in the world — yet without any provision being made for ordinary folk to borrow.

The banks were lending to companies, not to indi­viduals. They were not set up to do that. Their roles kept them way outside personal finance. Mr. Takei and others — the founders of such firms as Promise, Aiful and Acom — saw a business opportunity. They set themselves up as money-lenders, lending without security at killer rates up to a legal maximum currently set at 29.2 percent per annum.

What is happening now, all of a sudden, is that these same loan sharks, one by one, are falling into the clutches of the new mega-banks — the latter having decided that consumer finance is a way to go.

Thus, as I write, the news is that Promise is negoti­ating a deal with the Sumitomo Mitsui Financial Group, following on a similar move by Acorn and the Mitsubishi Tokyo Financial Group in March. And Takefuji? One piece of news, as we go to press, is that Ripplewood, the U.S. private-equity firm, is showing interest in Takefuji among other firms.

All of which prompts the thought that getting into bed with the loan sharks may turn into a nightmare experience for the banks. Certainly, it will bring them up against the realities of the market-place — where millions of small borrowers teeter on the edge of bankruptcy, and petty thugs venture forth to strong-arm those unable to cough up on their installments.

“SMBC’s plan to acquire Promise is the latest chap­ter in a colorful saga of strange bedfellows: bankers and hustlers” comments Neil Katkov, an analyst at Celent Communications in Tokyo.

[email protected]