Financial Services Minister Heizo Takenaka denied Tuesday that a senior financial regulator tried to blackmail Tokio Marine & Fire Insurance Co. into consolidating with Asahi Mutual Life Insurance Co.
Takenaka did acknowledge that Financial Services Agency Commissioner Shokichi Takagi, then head of the FSA's supervisory division, attempted to dissuade Tokio Marine from scrapping its consolidation plan.
But the attempts were "within the bounds of the supervisory jurisdiction of" the FSA, Takenaka said in an appearance before the House of Councilors Financial Affairs Committee.
The remarks were in response to a purported Tokio Marine transcript of talks between Tokio Marine Vice President Akihiko Mori on Jan. 21, 2002, and Takagi.
The transcript was disclosed last week by Kohei Otsuka, a Democratic Party of Japan lawmaker.
"Should the failure of an individual firm potentially trigger confusion in the financial system," Takenaka said, "the FSA could later be accused of neglecting its supervisory duties, should it not try to do all it can to prevent that."
The document depicts Takagi threatening to revoke Tokio Marine's license should Tokio Marine decide to suspend the merger. It was verified by Takagi and Mori, Takenaka said. But both denied that Takagi tried to blackmail Mori, Takenaka said.
Takagi said there were misinterpretations of what he said; Mori said there could be errors in the transcript, according to Takenaka.
Takenaka's report may be a turning point to help correct excessive interference in the private sector, Otsuka said. "But it also can be read as a license for (public officials) to do whatever they want" in the name of the public good."