SINGAPORE FUND SUES NISSAN SHATAI TO STOP LOW-INTEREST LOANS

Tue. July 21, 2009; Posted: 02:23 AM

TOKYO, Jul 21, 2009 (AsiaPulse via COMTEX) -- SGF | Quote | Chart | News | PowerRating -- Singaporean investment fund Effissimo Capital Management Pte. has filed a legal complaint against Japan's Nissan Shatai Co. (TSE:7222) over the Nissan Motor Co. (TSE:7201) group firm's low-interest loans to a sister financing company.

Effissimo is a major shareholder of Nissan Shatai with a roughly 14.5 per cent stake.

Nissan Shatai had loaned a total of about 58.9 billion yen (US$625.10 million) as of March 31 to a Nissan group financial firm as part of the group's centralized cash management system, according to an addendum to a shareholding report that the investment fund submitted to the Kanto Local Financial Bureau on Thursday.

What Effissimo takes issue with is that those loans carry interest rates below 1 per cent, compared with the slightly more than 2 per cent that Nissan Motor had to pay for short-term loans in the year ended March 31.

In the addendum, Effissimo demands Nissan Shatai stop the low-interest loans, arguing they are tantamount to willingly forgoing profits, and could possibly be illegal.

"The terms of the loans are also unclear, and they may well be disadvantageous to Nissan Shatai," the fund manager pointed out in the addendum.

Nissan Shatai has so far refrained from officially responding to Effissimo's charges.

"We cannot comment because we have not received any written complaint yet ," an official in Nissan Shatai's general affairs division said.

(Nikkei)maz

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