Three decades of rule by Yasuo Takei, the godfather of Japan?s consumer finance industry, over Takefuji, the company he founded in 1968, came to an end on Wednesday after it was announced part of the firm would be sold to a group of international investors.

Mr Takei owns 58 per cent of Takefuji through a web of family trusts, but had been forced to reduce this holding to below 25 per cent before November 17, the day on which he is due to be sentenced on charges of illegally tapping the telephone of a journalist.

According to Japanese law, any shareholder who has been sentenced to prison or received a suspended jail sentence cannot control more than 25 per cent of a non-bank lender without its licence being revoked. Prosecutors have demanded a three-year prison term for Mr Takei.

The conclusion of Mr Takei?s regime involves his 58 per cent stake in the firm being reduced to 24.8 per cent.

The deal has three main elements. Mr Takei will sell 17 per cent of the company - either immediately or over time - to a consortium of international institutional investors and hedge funds; he will transfer 12 per cent to a trust over which he will have no voting rights; and he will offload around 5.5 per cent to the market.

He will retain 35m shares, equivalent to a 24.8 per cent stake.

Mr Takei originally wanted to sell his stake in one block to a foreign investor, but bankers said a series of emotionally charged negotiations revealed Mr Takei was unable to agree on two issues: price and the degree of operational control he would retain.

After talks broke down with two leading contenders, Newbridge Capital, the US private equity company, and Goldman Sachs, Mr Takei hired a consortium of bankers led by Koji Fusa, an investment banker with whom he had a previous relationship, to structure the sale.

While Wednesday?s announcement will allow Takefuji to stay in business - assuming Mr Takei is sentenced to jail on November 17 - bankers said significant questions remained over the company?s future.

They pointed out Mr Takei will retain 24.8 per cent of the company and remain its largest shareholder, calling into question the logic behind the Financial Services Agency, the regulator, forcing him reduce his stake from 58 per cent in the first place.

They also queried why international investors would want to acquire Takefuji?s shares if they would not benefit from any restructuring of the company?s balance sheet, which could release up to Y275bn in excess capital that could then be redistributed to shareholders.

These issues have triggered speculation that there is a strategic buyer waiting behind the scenes to acquire Takefuji?s shares from the international investors once the uncertainty over the jail sentence has been removed.

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