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Mizuho told to submit further report on loans to yakuza

Kyodo

The Financial Services Agency issued a fresh order Wednesday to Mizuho Bank and its parent, Mizuho Financial Group Inc., to report on the bank’s lending to the underworld, after Mizuho’s previous account of the matter turned out to be incorrect.

Mizuho, one of Japan’s biggest banks, initially claimed only executives in charge of legal compliance had been aware of the transactions since December 2010, but it admitted Tuesday that top management was also aware of the misdeeds.

The FSA called for a detailed report by Oct. 28 on who knew about the loans and when, and what was reported during board and compliance meetings regarding the issue. It also ordered Mizuho Bank to report on the results of its internal investigation as well as that of a third-party panel set up Tuesday to probe the transactions.

The FSA will consider further administrative action against Mizuho after examining the reports.

According to Mizuho’s announcement Tuesday, former President Satoru Nishibori had been aware of the shady loans and current President Yasuhiro Sato was also in the position to know about them, contradicting its previous reports to the FSA.

Mizuho failed to deal with the matter properly, although reports that mentioned the loans were distributed at several board meetings.

Last month, the FSA ordered Mizuho to clean up its act after finding through an inspection that it had engaged in 230 transactions with “antisocial” groups involving more than ¥200 million.

The financial watchdog ordered Mizuho Bank to come up with a business improvement plan by Oct. 28 containing measures to prevent a recurrence.