It's an enduring mystery why Japan, which demands self deprecation as a social norm, often tolerates exceptional arrogance by its leaders. Mr Hiroo Mizushima, the 88-yearold former chairman and effective owner of failed Sogo department store ruled his fiefdom of 27 stores with an iron fist.
His employees, according to the daily Asahi Shimbun, referred to him as "God" or "emperor". During his 40 years in control, he pushed the firm from the highs of the bubble-era growth in the 1980s to the ignominy of the Tokyo District Court, where it filed for bankruptcy on Wednesday. Owing 1.87 trillion yen (£14.02 billion), Sogo's is the biggest non-finance firm bankruptcy in Japan.
Mr Mizushima's strategy, which, as Mr Mike Allen, senior analyst at ING Barings Securities Japan, says, "led to the demise of the company", was based on massive borrowing to fund real estate spending sprees, using existing stores as collateral.
In the eight years to 1994, 20 new Sogo stores were opened. But with more focus on establishing new stores rather than on what was being sold at existing outlets, many became unexciting places to shop and racked up losses.
But the issue of how to deal with these losses was never meant to end up in court. On June 30th, it was announced that Sogo and civil servants had stitched together a deal under which public money would be used to forgive the store of some £727 million in debt as part of a wider £4.71 billion debt waiver. This would have allowed it to avoid the embarrassment of bankruptcy. But the public backlash was immediate, with polls showing that 90 per cent of people opposed the plan.
This worried the ruling Liberal Democratic Party (LDP). Already reeling from the recent battering it received from urban voters angry at its free spending policies directed toward its rural supporters, the LDP balked at being seen to be associated with using taxpayers' cash to keep afloat a private firm with which it has close connections.
Last Tuesday, the LDP dispatched a leading party member to make an unprecedented plea to Sogo president Mr Kyoichi Yamada to retract the firm's request for a debt waiver, despite the fact the deal had been originally hammered out with a government agency.
Adding to the touch of cloak and dagger political pressure on Sogo were plunging sales. Department stores here especially count on the cash registers to ring in early July, a traditional gift-giving season.
But in a business that considers a drop of 10 per cent to be disastrous, Sogo's sales for the period were down by 15 per cent.
The reason for the customer boycott was simple. The experience of having trillions of yen of tax money used to bail out faltering banks over the last few years has left a thick residue of public bitterness.
But as all major Japanese banks benefited from the largesse, people couldn't effectively register their protest at the bailouts by shifting their accounts elsewhere.
But the Sogo case was different. Japan is not short of department stores and Sogo was the only one asking the public to pick up the tab for managerial failure. Disgruntled shoppers simply spent their money elsewhere.
The sales dive prompted Sogo to forget about debt-forgiveness and plump for bankruptcy, Mr Yamada said.
The decision has been hailed as a sign that Japan will no longer prop up huge unprofitable companies. The Asahi Shimbun saw the Sogo failure as a "turning point" for Japan's economy, a sign that the nation was finally accepting free market norms.
But Mr Allen rejected as a "fallacy" the idea that Sogo being allowed to go bankrupt represents a significant economic shift for Japan.
"Economically, there is no difference between bankruptcy and debt forgiveness. Under both you make the debt disappear and the company goes on in some form. The taxpayer loses no matter what."
Other losers will be Sogo's 10,000 workers, some of whom have already been fired with the closure on Thursday of three stores.
But the overall effect on the economy will be limited. Though the shares of big real estate and construction firms who were hoping for large-scale debt forgiveness plunged on Thursday, they recovered somewhat yesterday.
Also spare a thought for Mr Mizushima, who in April resigned as chairman of a company he had been with for 64 years. Since then, he has been the target of criticism as details emerge about his management style and inflated salary.
The daily Yomiuri Shimbun revealed that, over the last six years, as company losses mounted, the already extremely wealthy Mr Mizushima continued to draw a salary of about £3 million, ignoring a company system linking individual manager's pay to store performance, which he himself had created.
Current president Mr Yamada wants some of the money back. Though not legally obliged to do so, Mr Mizushima may be embarrassed into coughing up.
He has not said yet whether he will dig into his own pockets. He has, however, offered to return his company stock, which, as analysts have pointed out, is now almost worthless thanks to his calamitous leadership.
