Prosecutors arrested on July 4 a former chairman of the Dai-Ichi Kangyo Bank in connection with the major city bank's alleged payments to a corporate extortionist.
According to prosecutors, Tadashi Okuda, 65, is suspected of allowing 11.78 billion yen in loans to be extended through a nonbank affiliate to racketeer Ryuichi Koike between 1994 to 1996 in violation of the Commercial Code. His arrest makes him the eleventh DKB official held so far in the unfolding "sokaiya" scandal that has also embroiled Nomura Securities Co., the nation's largest securities firm.
Okuda became chairman in April last year, but stepped down on June 13 after the scandal, which unraveled first at Nomura, was traced to the bank. Another former DKB chairman, Kuniji Miyazaki, 67, died on June 29 after he hung himself at his home in western Tokyo. He was considered an important figure in the payoff scandal.
DKB allegedly gave 11.78 billion yen in loans to Koike through Daiwa Shinyo, DKB's nonbank affiliate to ensure his cooperation at the bank's annual shareholders' meetings. His holdings of 26,000 DKB shares makes him one of the bank's major shareholders.