The former chairman of Dai-Ichi Kangyo Bank pleaded guilty Friday to providing some 12 billion yen in illegal loans to a “sokaiya” corporate extortionist and said he is doing some deep soul-searching regarding his actions.Reading a statement in his first hearing before the Tokyo District Court, the bank’s former top leader, Tadashi Okuda, 66, owned up to the charges against him and said he feels “responsible for not being courageous enough to change DKB’s long-standing habit (of providing illegal loans to sokaiya).”Okuda added, however, that he was not clearly aware that providing such loans would be against the law because they were extended to sokaiya Ryuichi Koike, 54, via DKB’s affiliate nonbank moneylender rather than directly from the bank, and DKB did not make a legal guarantee regarding the loans.Prosecutors alleged that Okuda played a part in providing a total of 11.782 billion yen to Koike on 52 separate occasions between July 1994 and September 1996 in violation of the Commercial Code, in order to buy his silence at the bank’s annual shareholders’ meetings in 1995, 1996 and 1997.The Commercial Code prohibits corporations from giving special benefits to shareholders. Sokaiya purchase shares in companies to gain access to their shareholders’ meetings and threaten to disrupt them by making embarrassing revelations unless they are paid off.Along with Okuda, three other former DKB executives at Friday’s hearing pleaded guilty: Takeo Fukushima, 57, a former managing director in charge of screening customers’ loans; Michiyoshi Kusajima, 50, and Takushi Manabe, 49, both former deputy chiefs of the bank’s general affairs department.Fukushima claimed he was responsible for 7.35 billion yen in payoffs to Koike, Kusajima owned up to 4.43 billion yen and Manabe for 7.35 billion yen. However, Fukushima told the judges, “I would like you to understand that the system (of paying illegal loans to sokaiya) had already been set up when I took over the position and I didn’t have the power to reject the job or to change the system.”The four suspects are among 11 former DKB executives charged in the payoff scandal involving Koike. They are being tried in three groups. The first, made up of four executives, pleaded guilty at a hearing Monday. A second group of three appeared before the court Wednesday but two of them withheld pleas and one partially denied being involved in the payoff scandal.The scandal has embroiled more than 30 executives from DKB and the former Big Four securities houses — Nomura, Nikko, Daiwa and Yamaichi.
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