The Japan Federation of Bankers Associations decided June 17 to grant a request by scandal-tainted Dai-Ichi Kangyo Bank to be released from its duties as a director of the organization for the remaining 10 months of its term.
Naotaka Saeki, chairman of the banking industry body, told a news conference that DKB said last week it wished to suspend its role as director to enable the bank to concentrate on regaining public trust. The post will remain vacant until the new board of directors is chosen next April, according to Saeki. The board will operate with 28 members after the departure of DKB.
The nation’s second largest commercial bank is reeling from the discovery of allegedly illegal loans to a “sokaiya” corporate racketeer, which has led to the arrest of nearly a dozen former and present DKB executives over the past few weeks. The loans are suspected of later being used by the sokaiya, Ryuichi Koike, to purchase stock in Nomura Securities Co. Nomura is in turn suspected of offering illicit compensation to Koike.
Earlier this month, the Japan Federation of Economic Organizations (Keidanren) suspended Nomura and DKB from taking part in its activities for one year due to their shady operations. But Saeki said his association was not empowered to issue sanctions against any member financial institution, and that he personally believes that DKB’s withdrawal would be perceived as a disgrace and prevent the bank from taking part in any decisions made by the board.
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