The Supreme Court on Friday rejected the suspended sentence meted out to Hokkoku Bank’s former president for conspiracy to commit breach of trust and remanded the case to the Nagoya High Court.
“We were not able to resolve reasonable doubts about the charge of breach of trust” against Yasumori Honjin, 62, presiding Justice Hiroharu Kitagawa said.
The high court in January 2001 upheld a Nagoya District Court-imposed 30-month prison term, suspended for four years, ruling that Honjin conspired with executives of a prefectural credit guarantee association to cause the association to incur 80 million yen in losses by covering a bad loan made by the regional bank based in Kanazawa, Ishikawa Prefecture.
The association guaranteed an 80 million yen loan that Hokkoku Bank extended to a machinery maker in the prefecture in June 1993, but the borrower went bankrupt a few days later.
The association initially decided not to cover the loss, as it found the loan violated its credit insurance terms.
According to the earlier rulings, Honjin then conspired with three executives of the association to persuade the body to reverse its decision and repay the loan in July 1996. He threatened that the bank would not pay its required contribution to the association unless it did so, the courts said.
Honjin’s counsel has argued that he merely asked the association to repay the loan as part of his duties as bank president, hence his conduct did not constitute conspiracy to commit breach of trust.
Justice Kitagawa said it was questionable whether Hokkoku Bank could have refused to pay the association dues as Honjin indicated.
He added that it was not illegal in itself for the head of a bank to try to negotiate to get the credit association to reconsider its decision.
“There is no small reasonable doubt in recognizing that Honjin conspired with the association executives and committed breach of trust,” he added. “Unless the original ruling is scrapped, justice would be seriously miscarried.”
Prosecutors had argued that Honjin used his strong influence as head of the bank and threatened the association into acting illegally. His actions “went beyond what can normally be called negotiations,” they said in a statement.
Honjin’s lawyers lauded the Supreme Court decision, saying all of their arguments were supported by the bench, and expressed confidence in winning the remand trial.
“The defendant, his family and those around him suffered greatly” during the seven years since his arrest, said Masanori Tachi, who headed the legal team. “The judicial process is too long.”
The Nagoya High Public Prosecutor’s Office issued a statement saying that it would closely study the Supreme Court decision and work to prop up their case when it returns to the high court.
The three former executives of the association accepted suspended prison terms for breach of trust handed down by the Nagoya District Court in 1999.
In its ruling Friday, however, the top court also threw doubt on their convictions.