Mizuho Bank chairman resigns over yakuza loans
AFP and APTOKYO--Mizuho Financial Group said Monday the chairman of its banking business and two other top executives will resign over the Japanese lender's failure to crack down on loans to organized crime.
October 29, 2013, 12:22 am TWN
Mizuho, Japan's No. 2 bank by assets, failed to do what was expected in reducing and preventing mob-related loans, the panel said, though it concluded the bank had not engaged in a deliberate cover-up.
Mizuho has been under fire since it emerged last month that it processed hundreds of loans worth about US$2 million for the country's notorious yakuza crime syndicates.
On Monday a panel of lawyers hired by Mizuho to probe the transactions said that “many officials and board members were aware of, or were in a position to be aware of, the issue.”
“However, they failed to recognize it as a problem, believing that the compliance division ... was taking care of it,” said the panel's 100-page report.
The company also submitted its own report to regulators Monday, and said more than 50 executives would be punished, including Mizuho Bank chairman Takashi Tsukamoto. He would step down from his post but stay on as head of the parent company.
Mizuho Financial Group chief executive Yasuhiro Sato — who has acknowledged he knew about the loans but refused to quit — would work without pay for six months, while other managers would also see pay cuts.
Besides the exit of Tsukamoto, Mizuho's top compliance officer and its risk management director will resign Nov. 1.
Finance Minister Taro Aso slammed the transactions as a “huge problem” and said Mizuho's initial claims to regulators that executives knew nothing about the shady loans was “the worst thing a bank can do.”
The bank later admitted top executives were “in a position to know” about the mob business.
The panel's report Monday called on Mizuho to overhaul its compliance department, noting that the transactions were made via a complicated scheme involving an affiliate firm.
“In a nutshell, they failed to recognize the loans as Mizuho's own and relied on the other company for dealing with the issue,” panel head Hideki Nakagome told reporters.
Like the Italian mafia or Chinese triads, the yakuza engage 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.