Finance Minister Hikaru Matsunaga took punitive action Monday against 112 ministry officials, including Securities Bureau head Atsushi Nagano, for being excessively entertained by financial sector firms.

Nagano, the bureau’s director general, resigned after being slapped with a six-month, 20 percent pay cut, as did Takashi Sugii, deputy director general of the Banking Bureau, who received a four-month suspension.

Nagano, 54, and Sugii, 51, have been repeatedly mentioned in media reports on the financial sector’s excessive wining and dining of ministry officials. Both were elite career bureaucrats, and Sugii was viewed by many as a future contender for vice minister.

Though Matsunaga accepted their resignation papers Monday, Nagano’s departure officially takes effect only with Cabinet approval, a move that might not be completed until this morning. “I am sincerely ashamed of this unprecedented situation, and I hope all employees at the ministry will regain their sense of official discipline with this action,” Matsunaga told a news conference after announcing his decisions.

The finance minister hinted he had ordered Nagano and Sugii to step down, saying he told them to “take appropriate action,” given their share of responsibility for causing public trust in the ministry to plummet.

The fact that the ministry has in effect dismissed two of its most capable officials is an indication of the degree of public and political criticism being directed at it. Recent revelations that excessive wining and dining amounted to bribery for which four ministry members have been indicted caused unprecedented scrutiny of what many say is the nation’s most powerful ministry.

Many observers have been saying severe punitive measures are needed if the ministry is to be convincing when it promises to make financial administration more fair and transparent as the “Big Bang” financial system deregulation gathers steam.

The need to start with a clean slate was also imperative, given that the Financial Supervision Agency will be established by the end of June. Many staffers at the new agency, which will handle inspections, will be transferred from the Finance Ministry.

In addition to the two senior officials, Seiichiro Sato, formerly in the Insurance Division, also resigned. Nagano will be replaced by Akira Yamamoto, a deputy director general at the Securities Bureau, pending formal appointment of a successor, according to ministry officials.

Including Nagano and Sugii, a total of 32 officials were reprimanded under the National Civil Service Law, which sets the code of conduct for national-level public officials. The remaining 80 were punished in line with the ministry’s internal regulatory code.

Reprimands under the law will remain in the records for the rest of their careers and affect future promotions, ministry officials said.

Matsunaga also indicated that punishment against Toshiro Muto, current head of the ministry’s secretariat, would be taken in due course after he finishes responding to questions regarding the probe in the Diet.

Matsunaga said the probe initially involved over 550 ministry officials, and that in the end over 1,050 people were questioned.

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