Business

UFJ in hot water over concealment

The Financial Services Agency will hit UFJ Bank with a business improvement administrative order, possibly later this week, over its attempts to evade an agency inspection by concealing in-house documents on borrowers, government sources said Thursday.

The order will instruct UFJ Bank, a core unit of UFJ Holdings Inc., to drastically overhaul its internal management system, the sources said.

The agency views the coverup as a violation of the banking law and is consulting with the Justice Ministry about the possibility of filing a criminal complaint against the bank, according to the sources.

Last fall, FSA inspectors found a large amount of documents at the bank showing that the financial condition of its large borrowers was worse than indicated in papers it had submitted earlier to the agency.

UFJ Bank officials maintain that the documents were merely simulations of what would occur if the business environment worsened and that the bank had not deliberately hidden official data.

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