'Mizuho execs knew about gangster loans'
TOKYO: Mizuho Financial Group executives knew the firm was doing business with gangsters but failed to stop it, a panel said yesterday, as Finance Minister Taro Aso slammed the banking giant over the affair.
Mizuho, one of Japan's biggest banks, has been under fire since it emerged last month that it processed hundreds of loans worth about US$2 million (RM6.28 million) for the country's notorious yakuza crime syndicates.
Yesterday, a panel of lawyers hired by Mizuho to probe the transactions said "many officials and board members were aware of, or were in a position to be aware of, the issue. However, they failed to recognise 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 yesterday, 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. A compliance executive would be removed from the bank's board.
The panel's report 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 recognise the loans as Mizuho's own and relied on the other company to deal with the issue," said panel head Hideki Nakagome.
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".
He said he would consider penalty against the bank.
His remark appeared to indicate that the Financial Services Agency may not force any harsher punishments on Mizuho after having ordered the bank to improve business practices as the lender did almost nothing about the mob lending for more than two years. Agencies