The Financial Services Agency will file a criminal complaint against UFJ Bank and several former executives for allegedly violating the Banking Law by blocking FSA inspections, sources said Wednesday.
A special investigative squad from the Tokyo District Public Prosecutor's Office is expected to launch an investigation into the case after the FSA files the complaint later this week, they said.
The FSA has concluded its action will not impede the planned merger between UFJ Holdings Inc. and Mitsubishi Tokyo Financial Group Inc., the sources said. UFJ Bank is the core bank of UFJ Holdings.
In June, the FSA issued business improvement orders to UFJ Bank in connection with a range of operational problems, including its alleged concealment of documents from FSA inspectors.
The financial watchdog said that during its regular inspections carried out from August 2003 to May, its inspectors discovered that the bank had concealed important documents that would affect the classification of borrowers.
Inspectors also found that the bank transferred important data.
The FSA alleged that the bank's management was involved in the systematic obstruction of FSA inspections by sending e-mail messages instructing staff to conceal documents.
UFJ Bank initially insisted it had no intention of obstructing FSA inspections but later acknowledged management had been aware of questionable practices.