Tuesday, October 8, 2013
DJ: Mizuho CEO Admits Former Bank Head Told About Loans To Crime Group
TOKYO--Mizuho Bank chief executive Yasuhiro Sato said Tuesday the bank's former head, Satoru Nishibori, received reports about loans to people connected to organized crime, apparently contradicting earlier remarks by bank officials who said top management wasn't aware of any wrongdoing.
Mr. Sato said he personally was also "in a position" to know about the problem as early as July 2011, citing materials on the loans handed out during a board meeting he attended.
"I do not consider it the case that I bear no responsibility" in the matter, Mr. Sato said at a news conference.
The bank said in a news release that an in-house investigation found its top management had received reports about the transactions.
Mizuho Bank had previously said at least four senior executives in charge of legal compliance knew about loan transactions with members of crime syndicates for more than two years from 2010, but they didn't alert the bank's chief executive or its board.
On Sept. 27, the Financial Services Agency slapped the core banking unit of Mizuho Financial Group (8411) with an order to submit a plan to improve its operations after finding it had around 230 transactions with criminal groups, including yakuza.
The transactions were mostly automobile loans made through its credit loan unit, Orient Corp., but financed by the bank, totaling around Y200 million ($2 million), according to the FSA and Mizuho.
Mizuho said last week its bankers discovered the transactions in 2010 and started warning the credit-loan unit not to accept further loan requests from customers identified as members of criminal organizations. But they failed to cut off the existing loans or inform top executives and regulators until instructed to do so in March by the FSA, which uncovered the transactions in a routine inspection in December.
Mizuho also said Tuesday a third party committee launched earlier in the day would go ahead with a further investigation.