Officials of the Mizuho financial group on Wednesday blamed the group’s recent computer fiasco on a chief information officer who reportedly failed to notify top management about the possibility of a large-scale system failure.

The officials, who asked not to be named, said the results of inspections by the Financial Services Agency and an in-house investigation show that the officer, who was from the former Dai-Ichi Kangyo Bank, covered up the problems to avoid causing a delay in the group’s April 1 system integration.

Separately, Terunobu Maeda, president of Mizuho Holdings Inc., told the House of Representatives Financial Affairs Committee the same day, “Those in charge of the system development failed to report to the group’s top management.”

The massive computer failure occurred following the April 1 launch of Mizuho Bank and Mizuho Corporate Bank under Mizuho Holdings. The trouble threw operations at the two banks into chaos, as customers were double-billed for utilities charges and most of the 7,000 automated teller machines at the banks malfunctioned.

The two Mizuho banks were created through the merger of DKB, Fuji Bank and Industrial Bank of Japan.

The FSA, in cooperation with the Bank of Japan, launched a monthlong probe into the group on May 8 and completed it June 6. On Tuesday, the financial regulator notified the Mizuho group of the outcome of its inspections.

According to the officials, when the FSA conducted inspections on the Mizuho group last year, it reminded the group of the need to accelerate efforts to integrate the three banks’ systems because their preparations were reportedly inadequate.

The agency then asked Mizuho about 20 times to submit progress reports, only for the banking group to keep reiterating that preparations were proceeding smoothly.

The Mizuho group is expected to unveil as early as possible a range of measures to prevent a recurrence of the problems and disciplinary measures against those deemed responsible.

The chief information officer is expected to face severe punishment over his direct responsibility for the problems.

The Mizuho group’s internal probe concluded that the group did not have an effective mechanism to check the reliability of the dubious reports filed by the information officer, according to the officials.

The group also failed to pay enough attention to potential system risks and respond properly to the results of inspections by the authorities.

The group’s investigations also showed that a power struggle among the former three constituent banks undermined the overall integration process.

Furthermore, the Mizuho group did not test the computer systems sufficiently and did not cooperate enough with corporate clients, the investigations showed.

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