The Tsu District Court ordered the former president of a defunct credit union in Mie Prefecture to pay 66 million yen in damages to the Resolution and Collection Corp., which had filed a lawsuit over the credit union's illegal lending.
The court ruled that Tatsuo Ichikawa, 67, former president of the Mie Prefectural Credit Union, must pay the amount demanded by the RCC, a special unit set up by the government to deal with bad loans by failed financial institutions, saying he had neglected his duty as president of the credit union.
According to the ruling, Ichikawa caused the union to lose around 265 million yen by illegally lending about 150 million yen in August 1997 to a building owner in Yokkaichi, Mie Prefecture, knowing the loans were unrecoverable.
He accepted the building as collateral knowing it was already serving as collateral for another loan by a housing loan company, the ruling said.
RCC had originally filed three damages suits against Ichikawa and three other former executives of the credit union demanding 330 million yen.
But RCC ended up withdrawing the two other suits after collecting part of the damages from the credit union and accepting a settlement package from the three other executives.
The four executives of the firm, including Ichikawa, were arrested in January 2000. Four months later, they were found guilty in a criminal suit and Ichikawa was forced to serve a 14-month prison term.