Japan bank to punish executives over loans to gangsters

October 25, 2013
Shares
Japanese megabank Mizuho's Chairman Takashi Tsukamoto, pictured here in January 2009, will step down from his post over a lending scandal/AFP
Japanese megabank Mizuho’s Chairman Takashi Tsukamoto, pictured here in January 2009, will step down from his post over a lending scandal/AFP

, Tokyo October 25- Japan’s Mizuho Bank will punish more than 30 executives over revelations that the lender made loans to underworld figures, reports said Friday, in the latest chapter of a headline grabbing scandal.

The unit of Mizuho Financial Group, Japan’s third-biggest bank, has drafted punishments ranging from pay cuts to demotions to atone for the shady business dealings, the leading Nikkei business daily and Jiji Press news agency said.

The bank declined to comment, saying “we have not made any decisions on this matter”, as Tokyo police reportedly probe its links with Japan’s Yakuza crime syndicates.

Mizuho Financial Group’s Tokyo listed shares were down 1.44 percent to 204 yen ($2.10) on Friday.

The lender has been under fire since it emerged that Mizuho had processed hundreds of transactions worth about 200 million yen ($2.0 million) for what regulators described as “anti social forces”, a common term for Japan’s mobsters.

The reports Friday said Mizuho Bank chairman Takashi Tsukamoto would step down from his post, but stay on as head of the parent company, according to Jiji.

Mizuho Financial Group Chief Executive Yasuhiro Sato who has acknowledged he knew about the loans would work without pay for six months, the reports said.

Other managers would also see pay cuts while a compliance executive would be booted from the bank’s board, they added.

Last month, Japan’s Financial Services Agency admonished Mizuho for taking “no substantial steps” in dealing with the issue after it was first discovered two years ago, and pointed to “serious problems” with its compliance monitoring.

The bank initially said its top executives did not know about the payments.

But Sato later admitted he and others had been appraised of the dubious dealings with members of Japan’s underworld.

The bank chief added that he would not be stepping down from his role at the helm of the huge financial group.

Sato’s admission came as it emerged Mizuho was turning down an award it had been given for its record on transparency.

Like the Italian mafia or Chinese triads, the yakuza engages in activities ranging from gambling, drugs, and prostitution to loan sharking, protection rackets, white collar crime and business conducted through front companies.

The gangs, which themselves are not illegal, have historically been tolerated by the authorities, although there are periodic clampdowns on some of their less savory activities.

Shares

Latest Articles

Stock Market

Most Viewed