Itochu, investment fund consider help for embattled Bigmotor

Japanese trading house, Itochu, says it, its energy subsidiary and an investment firm have concluded a basic agreement with Bigmotor that could lead to the restructuring of the troubled used-car dealer's business.

Bigmotor's sales plunged after it was found to have filed fraudulent insurance claims for unnecessary vehicle repairs. It has been looking for outside financial help to rebuild.

Itochu, Itochu Enex and J-Will Partners said on Friday they will begin due diligence to verify Bigmotor's assets following the agreement. They will make a final decision on whether to step in by next spring.

A stake in Bigmotor could potentially boost Itochu's group operations, including car sales and servicing, and auto insurance.

Sources say the deal was reached on condition that Bigmotor's founding family, including former president Kaneshige Hiroyuki, will not be involved in its management.

The Financial Services Agency has decided to revoke Bigmotor's registration as an insurance agent at the end of this month. The transport ministry also imposed administrative penalties on the company for violations including inflated repair fees.