The Tokyo District Court on Friday ordered two former executives of the failed Nippon Credit Bank to pay 500 million yen in damages to the state-run Resolution and Collection Corp. because they hurt the bank by extending irrecoverable loans.
The RCC took over the loans from NCB, reincarnated as Aozora Bank.
Presiding Judge Mariko Watahiki said the executives violated their obligation to be careful by failing to gather necessary information.
NCB extended 7 billion yen in loans in November 1991 to a golf course developer that already had a massive net capital deficit. The loans were made with the approval of former NCB Vice President Katsuaki Tsuneyoshi, one of the defendants.
Of the 7 billion yen, 6.6 billion yen became irrecoverable.
Prosecutors have already indicted former NCB chairman Hiroshi Kubota and two other top executives of the bank for alleged window-dressing of financial statements to hide bad loans.
Takushoku damages
SAPPORO (Kyodo) Nine former executives of the failed Hokkaido Takushoku Bank were ordered Friday to pay a combined 650 million yen to Resolution and Collection Corp. for damaging the bank by providing dubious loans to three Sapporo hoteliers.
Sapporo District Court presiding Judge Katsuhiko Kasai said, "Their lending decision was inappropriate, based on insufficient gathering of information and evaluation."
Ex-Takushoku President Hiroshi Yamauchi, 76, and his colleagues extended about 12.3 billion yen in loans to the Sapporo-based firms for the construction of hotels and other purposes between 1991 and 1993.