Japan Shuts Firm, Says Billions Lost

TOKYO—Japan's financial regulator said Friday it has halted operations of a little-known Tokyo money-management company after the firm allegedly lost billions of dollars in client money.

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The offices of AIJ Investment Advisors in Tokyo

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In one of the biggest cases of its kind in Japan, with Tokyo's reputation as a financial center still bruised by the billion-dollar Olympus Corp. accounting scandal, the regulator said investigators found that AIJ Investment Advisors Co. can't account for "most of" the 183 billion yen, or about $2.3 billion, in pension-fund assets under management.

The money belongs to a mostly unidentified range of Japanese companies. Microchip-testing-equipment maker Advantest Corp. and industrial-robot maker Yaskawa Electric Corp. have confirmed that they placed pension money with AIJ.

Underlining the gravity of the case, Financial Services Minister Shozaburo Jimi said at a news conference in the capital that the regulator, the Financial Services Agency, will now scrutinize operations at all 263 investment-management firms in Japan because of the AIJ investigation.

The FSA said securities investigators have been probing 120 cases involving AIJ clients since January. But officials said that with the investigation ongoing, they couldn't comment on details, including why the money was missing or the exact amount of losses. The agency has ordered the firm to suspend operations for a month.

Phone calls to AIJ's office in central Tokyo were automatically routed to an answering machine asking callers to try again later. The firm's Internet site says it was founded in 1989, capitalized at 230 million yen, with Kazuhiko Asakawa named as representative director.

Speaking outside the company's unmarked office on the 11th floor of a building in Tokyo's Nihonbashi district, Sei Takahashi, a lawyer and representative for AIJ, declined to comment on the missing funds.

"We are not in a position to provide a detailed explanation, since the SESC probe is ongoing. We are cooperating with the authorities," he said. FSA officials separately confirmed they are in contact with executives from the company as investigators continue their inquiry.

Visitors observed entering the office were described by one worker as SESC officials, but they declined to identify themselves or answer questions.

A Yaskawa Electric spokesman described the company's investments with AIJ as "very minor," accounting for less than 2% of all its pension-fund investments.

In a statement, Advantest said it has about 1.7 billion yen in outstanding investments deposited with AIJ, equal to about 8% of its total pension-fund investments.

An Advantest spokeswoman said the company is still looking into the details of the case and can't yet clarify whether or by how much the incident may affect its earnings.

—Atsuko Fukase and Juro Osawa contributed to this article

Write to Kenneth Maxwell at kenneth.maxwell@dowjones.com