Prosecutors have arrested a former president and two former vice presidents of the failed Long-Term Credit Bank of Japan on suspicion of violating the Securities and Exchange Law.
Arrested Thursday were former President Katsunobu Onogi, 63, Yoshiharu Suzuki, 62, and Masami Suda, 59.
Their arrests followed searches of the LTCB head office, the homes of the three and offices of the bank's affiliated nonbank financing companies.
The investigators raided the locations for evidence that bad loans had been concealed. Authorities suspect the former LTCB executives were involved in the bank's underreporting of the amount of irrecoverable loans.
The former executives are also suspected of violating the Commercial Code by illegally paying dividends to shareholders even though the bank's financial condition did not warrant such a payout.