TOKYO. Dec 31: Japans third biggest credit union went under with huge bad loans Friday. adding to a run of failures among financial Institutions serving the ethnic Korean community, reports AFP.

Chogin Kinki Shlnyo Kumial asked the Financial Reconstruction Commission (FRC) to replenish its depleted liquidity holdings.

FRC chairman Hakuo Yanagisawa told a news conference his commission responded bv declaring Chogin Kinki insolvent and sending in government-appointed administrators.

Under Japanese laws to protect the financial system, the Kobe-based credit union is eligible for an injection of public funds to meet its obligations to refund depositors. FRC officials said.

"It is unfortunate that a financial institution, which is a pillar of a community, has collapsed." Yanagisawa said.

J \\< have taken the mcasun under Japanese law in older to help stabilise the financial sys-

trill.”

< 'hogin Kinki is the biggest credit union affiliated to the pro-Pvongyane General Association of Korean Residents, which groups an estimated 200.000 of the 700.000 ethnic Koreans in Japan.

Tlic association Is believed to have helped the North's near-bankrupt economy with cash and goods, some of which are suspected to have boosted its armed forces.

Chogin Kinki has 640 billion yen (5.6 billion dollars) In deposits. making it the third biggest credit union in Japan.

Ils liabilities exceeded assets by 84.2 billion yen at the end of last March.

The firm was created in 1997 by the merger of five North Korea-linked credit unions in the western city of Osaka and its vicinity.

The government injected 315.9 billion yen of public funds into Chogin Kinki in May 1998 to enable ii to lake over the assds and liabilities of Chogin (isaka and reimburse thru depositors