The Saitama District Court on Tuesday sentenced a former senior official of the failed Saitama Shogin credit union to 2 1/2 years in prison, suspended for four years, for causing financial damage to the firm.
According to the ruling, former Senior Managing Director Hiroshi Takei, 72, conspired with Taigen Gon, 62, the former head of the credit union, and two others to provide loans totaling 2.2 billion yen via several paper companies to a Tokyo-based housing development cooperative where a relative of Gon served as a senior official.
The Saitama-based credit union mostly served South Korean residents of Japan.
Although the cooperative failed to make any repayments, the four allowed land in Yokohama that it had put up as collateral to be removed from a lending agreement in 1997, compromising the credit union's ability to collect the loan.
"The criminal liabilities of the defendants cannot be downplayed," said presiding Judge Masaki Wakahara. "But the former head (of the credit union) played the key role in the case and the three defendants were his subordinates."
The court also sentenced one of the other two involved in the case to 2 1/2 years in prison, suspended for four years, and the other to 32 months, suspended for five years.
Gon, who pleaded not guilty at his first hearing in April 2000, was sentenced to 38 months in prison on May 1 at the district court but has appealed the ruling to the Tokyo High Court.