Days after Japan’s Financial Services Agency (FSA) said it will be looking closely into transactions of the country’s three largest banks, another bank has admitted they have conducted transactions with members of organized crime. This is in light of the investigation into Mizuho Financial Group who also gave loans to known gangsters or yakuza.
Shinsei Bank admitted on Thursday that one of their subsidiaries have given more than a dozen loans and opened accounts for “anti-social forces”, the legal euphemism for the gangsters. The bank’s President, Shigeki Toma, says their internal controls were not strict enough to keep out these dubious transactions. Finance Minister Taro Aso lauded Shinsei for its admission and said they were being “sensible” by revealing it before any other investigation was initiated. Just a few days before, he called Mizuho’s lapse a “huge problem” and that their previous claim that the top executives knew nothing about the loans to the yakuza was “the worst thing a bank can do.”
The banking world is still reeling from this latest scandal, which saw the resignation of Mizuho’s banking unit chairman Takashi Tsukamoto (who’ll stay on as chair of the holding company). The bank’s president Yasuhiro Sato plus other top-level executives will also be taking a 6-month pay cut as their contrition for the company’s lax regulations that led to this whole situation. The government however, is looking into the possibility of additional sanctions on Mizuho as the independent panel found them too casual with their loan management. But the panel cleared them of any intention to cover up the financial scandal. The FAS will now be looking closely at the financial dealings of Mitsubishi UFJ and Sumitomo Mitsui Banking Corp as well to make sure nothing like this has been happening at the country’s two biggest lenders.
[ via AFP ]
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