Opposition lawmakers on Wednesday revealed what they claim is a letter and an internal memo from a Resona group whistle-blower suggesting that the Financial Services Agency pressured Resona to window-dress its capital adequacy ratio to prevent its insolvency from surfacing.

The Democratic Party of Japan demanded during a Diet committee that Financial Services Minister Heizo Takenaka question FSA officials who are suspected of involvement in the matter to confirm whether the allegations are true.

Although Takenaka told the House of Representatives Committee on Financial Affairs that he conducted hearings of officials and confirmed that the agency did not apply such pressure, he agreed hold hearings again and promised to report the results to the Diet.

Last week, Resona Holdings Inc. asked the government for 1.96 trillion yen in public funds after its auditor said it would accept only three years’ worth of deferred tax assets, or potential future tax refunds, as part of the group’s capital.

To get the refunds, a business has to make a profit, and Resona has been in the red for three years running.

The documents in question were obtained by Kohei Otsuka, a House of Councilors member of the DPJ who distributed copies to reporters and other lawmakers after deleting a part of one sentence that he said could identify the writer.

In the letter, the writer claimed that Resona repeatedly “petitioned and threatened our auditor” to approve an inflated capital adequacy ratio because Masaki Suzuki, head of the FSA’s Banks Division One, ordered the bank to do so.

A memo attached to the letter outlines the dialogue between FSA officials and Resona workers during a May 10 meeting — a full week before Resona announced it was in need of public funds.

It quotes Hiroshi Nakahara, commissioner for financial crisis management at the FSA, as saying that the planned bailout scheme to save Resona “is designed to merely keep afloat a business that should in fact be dealt with through bankruptcy procedures.”

The quote, if true, contradicts the government’s official position that the bailout scheme is designed to pre-empt Resona’s failure.

Opposition lawmakers have argued that Resona is already effectively bankrupt, as its total liabilities exceed its assets if deferred tax assets are excluded from the calculations.

Takenaka has also repeatedly denied that the FSA intervened in any talks between the Resona group and its auditor in assessing the deferred tax assets.

Fumihiko Igarashi, financial services minister within the DPJ’s shadow Cabinet, said the DPJ believes the contents of the documents are authentic.

“If these things are true, what the FSA and Mr. Takenaka have told us are either wrong or lies,” he said.

The Resona-FSA-auditor controversy has been simmering in newspapers and magazines for 2 1/2 weeks, but now that the matter has been brought before the Diet, the FSA must respond to questions regarding the Resona bailout from lawmakers.

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