Shinsei admits it also lent to the yakuza

AFP-JIJI

The loans-to-yakuza scandal gripping the banking sector has widened with Shinsei Bank’s admission that it, too, did business with the underworld.

Finance Minister Taro Aso on Friday lauded Shinsei for admitting the previous day that one of its subsidiaries made dozens of loans to yakuza, who engage in crimes ranging from prostitution and drugs to extortion and white-collar crime.

“Our internal controls were not strict enough,” Shinsei President Shigeki Toma told reporters in Tokyo on Thursday.

Shinsei also admitted opening accounts for what it called “anti-social forces,” a common euphemism for mobsters.

The news came days after the Financial Services Agency said it would probe the nation’s top three banks after Mizuho Bank’s loan scandal reportedly sparked a police investigation into Japan Inc.’s ties with organized crime. The FSA said it would look into the business dealings of the mega-bank’s parent, Mizuho Financial Group, and rivals Mitsubishi UFJ and Sumitomo Mitsui Banking Corp., but did not elaborate.

Mizuho has been under fire since it emerged in September that it lent about $2 million to yakuza, mainly in the form of hundreds of automobile loans, via consumer financing subsidiary Orient Corp.

The watchdog’s probe was announced a day after a panel of lawyers hired by Mizuho said the bank’s executives knew it was doing business with gangsters but failed to stop the practice out of lack of interest. The panel also said it found no evidence the bank was colluding with yakuza.

On Friday, Aso called Shinsei’s admission “sensible” days after terming Mizuho’s gang loans a “huge problem.” Aso said Mizuho’s initial — and incorrect — claims that its executives knew nothing about the shady loans was “the worst thing a bank can do.”

Authorities have long battled to keep the yakuza from infiltrating the corporate sector.

  • RMMStaInes

    The Government should also investigate Mizuho Bank deeply if there are any manipulation of the lottery winners with these organized crime group.

  • RMMStaInes

    The Government should also investigate Mizuho Bank deeply if there are any manipulation of the lottery winners with these organized crime group.