Mizuho Bank President Yasuhiro Sato said Tuesday former President Satoru Nishibori had been aware of the bank lending to yakuza groups since July 2010 at the latest, contrary to the bank’s earlier claim that only executives in charge knew of the transactions.
Appearing at a press conference for the first time since the scandal broke, Sato said Nishibori also received a report of the illicit transactions in December 2010 when the bank found out. Nishibori was president of Mizuho Bank at that time.
Sato, who concurrently serves as president of the bank’s parent company, Mizuho Financial Group Inc., said he himself “was in a position to be able to know” about the loans in question, referring to his attendance at a board meeting of the group in July 2011.
The Financial Services Agency ordered Mizuho to improve compliance on Sept. 27, saying the Tokyo-based lender failed to take steps to end loans to the groups for more than two years after becoming aware of them. The bank made 230 loans, mostly for automobiles, valued at about ¥200 million, the FSA said.
Sato’s announcement reverses the bank’s prior explanation that reports over the illicit transactions were made only up to executive officers in charge of legal compliance, including then Deputy President Tetsuro Ueno.
It was also revealed that the bank failed to promptly report to the FSA of the top management’s awareness.
Sato said he will resign from all public posts, including as a government panel member, to focus on dealing with the scandal.
Mizuho has set up an internal committee and a panel of three outside experts to improve compliance. Hideki Nakagome, an ex-judge, will lead the external probe. Nakagome previously investigated accounting fraud at Olympus Corp. and Nomura Holdings Inc.’s leaks to inside traders.
Mizuho has also declined an award it was set to receive for transparency.
A group of securities analysts had selected Mizuho Financial Group as the best banking firm for information transparency, saying “the company was praised for its attitude for proactively disclosing information that may not necessarily benefit the firm or even about the company’s weak points.”