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Five former executives of bankrupt Tokyo Sowa Bank were found guilty Tuesday of falsely making it appear the bank had adequate capital reserves through a bogus capital increase scheme worth 18.9 billion yen.

The Tokyo District Court gave them suspended prison terms.

Shoichi Osada, 80, former chairman of the Tokyo-based regional bank, which now operates as Tokyo Star Bank, was sentenced to three years, suspended for five years.

Former President Mizuho Kojima, 63; former Vice President Masatoshi Fukui, 59; Hiroyasu Ebisui, 60, a former senior managing director; and Tachiki Takahashi, 50, a former managing director, were sentenced to between 18 months and 30 months in prison, suspended for either three or four years.

Osada, Kojima and Fukui immediately appealed their rulings to a higher court, their lawyers said.

Prosecutors were seeking prison terms of three years for Osada and between 18 months and 30 months for the others.

“Tokyo Sowa Bank effectively wired money to itself to increase its capital base, using its affiliate and others as nominal purchasers of shares,” presiding Judge Shoji Ogawa said in the ruling.

“It was a fictitious money wire and is not valid,” he said, dismissing the defendants’ claim that the money used to increase the bank’s capital base was valid because it had actually been wired to the bank.

However, Ogawa said there was room for leniency, pointing out they committed the crime in the hope of keeping the bank operating and rebuilding its finances.

The five were accused of planning a third-party allocation of shares for the bank on two occasions, in 1997 and 1998, to raise the bank’s capital adequacy ratio above the required 4 percent, a figure agreed to in April 1998, for banks operating domestically.

By that time, the bank’s business had deteriorated as it went about disposing of massive nonperforming loans it had been saddled with in the early 1990s, when the asset-inflated bubble burst.

But the bank was unable to find enough investors to buy shares, prompting the defendants to lend a total of 18.9 billion yen to three firms, including an affiliate.

They then had the companies wire the money to the bank as payment for the share acquisition and later filed falsified financial documents detailing the bank’s capital base, the indictment said.

In June 1999, the Financial Reconstruction Commission — now known as the Financial Services Agency — determined that Tokyo Sowa Bank was insolvent and a private U.S. equity fund took over its operations. The bank eventually restarted operations as Tokyo Star Bank in June 2001.

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