Both Sega Sammy Holdings and Index Corporation confirmed on Wednesday that Sega Sammy's subsidiary Sega is taking over the operations of Index Corporation. Index owns and manages Atlus, a former independent company and the current brand of games such as Etrian Odyssey, Shin Megami Tensei , and Persona .

Sega Sammy Holdings was selected as a sponsor under Index Corporation's civil rehabilitation, a relatively new form of bankruptcy procedures in Japan. On Wednesday, the two companies signed an agreement under which Index Corporation's business will be transferred to Sega Dream, a newly established company wholly owned by Sega. The companies plan for the transfer to take effect by November 1.

Nikkei and Bloomberg reported on this transaction earlier on Wednesday. Soon after, Sega issued a news release that did not deny the reports, but said that Sega did not make an announcement yet.

Background

Index came under suspicion for improper accounting in June. Index reported that it earned a total of 18.3 billion yen (about US$190 million) last year from console/portable system games and smartphone games. However, according to those involved in the investigation, the company is under suspicion of exaggerating revenues using round-trip transactions.

Later that month, Index filed for civil rehabilitation bankruptcy. Civil rehabilitation is a relatively new form of bankruptcy procedures in Japan, having been passed into law in 1999. Index listed about 24.5 billion yen (about US$250 million) in debts.

Bloomberg Japan reported last month that about 20 companies, including Sega-Sammy Holdings, were looking to acquire Index. According to Bloomberg's source, the first round of bids were in the range of 20 billion yen (about US$200 Million). The final bidding candidates were expected to be selected and a final deal to be made sometime last month.