Japanese financial firm SBI Holdings Inc. said Monday it has decided to end the practice of soliciting funds from investors after its lending unit was found to have engaged in illegal activities connected to some loans.
The Tokyo-based SBI Social Lending Co. provided funds to companies after soliciting investments through its social lending program, a practice also known as peer-to-peer lending.
A third-party panel established by the parent firm concluded last month, however, the subsidiary used false or misleading information in seeking funds for 39 loan contracts taken out by companies.
SBI's parent company said it had already stopped soliciting new funds in March and will ensure investors impacted by the illegal practices will receive the money they invested back in full.
Loans involving investors who were not impacted by the company's illegal actions will see their contracts honored and they will be overseen in the future by SBI's asset management department.
Earlier this month, it was reported the Financial Services Agency was considering ordering the SBI unit to suspend operations over alleged illegalities.
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