Dai-Ichi Kangyo Bank President Katsuhiko Kondo admitted June 5 that DKB executives had maintained cozy relations with a late powerful “sokaiya” leader, and that the man even influenced personnel matters at the major commercial bank.

Rikiya Kijima, who died in 1993, is known to have been one of the most powerful corporate extortionists in the nation. Kondo said during unsworn testimony before the Lower House Budget Committee that former DKB executives started giving special favors to sokaiya Ryuichi Koike — now under arrest over the scandal involving DKB and Nomura Securities Co. — at Kijima’s request.

It was the second time Kondo has been summoned to the Diet to testify about more than 30 billion yen in uncollateralized loans the bank has allegedly made since the 1980s to a younger brother of Koike. The elder Koike is believed to have used the funds to buy stocks in the nation’s four largest securities firms, including Nomura. Ryuichi, 54, and Yoshinori Koike, 52, were arrested May 15 on suspicion of taking about 49.7 million yen from Nomura in violation of the Commercial Code, which prohibits companies from paying off corporate racketeers.

Sokaiya extortionists specialize in blackmailing firms by threatening to disrupt annual shareholders’ meetings. They obtain entry to the meetings by buying shares in the firms.

Kondo, who said that he has not had any relationships with extortionists, including Kijima and the Koike brothers, also said that Kijima had influence on his seniors when it came to personnel matters in the major city bank. “I think that some DKB executives thought that they might face retaliatory action, including demotion, if they did something to displease Kijima,” Kondo said. “We are really sorry for what DKB did. We should be ashamed of ourselves,” Kondo said.

Heckling erupted when Kondo said he still believes “that the former executives did not consider Kijima to be a sokaiya.” The close relationship between Kijima and the DKB executives was further clarified when committee member Kensho Sasaki, from the Japanese Communist Party, got Kondo to reveal that both the then president and vice president of DKB, along with several other executives during that time, had attended a wedding reception for Kijima’s son.

Reversing earlier remarks, Kondo indirectly admitted that his bank can no longer insist that the huge loans were made solely to the younger Koike, who runs a small real estate firm. In earlier testimony, Kondo had insisted that the money, 27.5 billion yen directly from DKB and 4 billion yen from Daiwa Shinyo, a DKB nonbank affiliate, had been loaned to the younger Koike and that the bank had not carried out any irregular trading with the elder Koike.

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