SAPPORO (Kyodo) The Sapporo District Court on Monday ordered three former executives of the now-defunct Asahikawa Shoko Shinyo Kumiai bank to pay a combined 300 million yen to the state-backed Resolution and Collection Corp. for inflicting damage on the lender's financial standing by extending questionable loans and paying illegal dividends.
According to the court, the three -- 70-year-old former president Kiyoyuki Doki and two others who have since died -- window-dressed the credit union's books between fiscal 1992 and fiscal 1997 through such means as not logging losses from sales of investment trusts.
As a result, they illegally paid out some 310 million yen in dividends during that period. In addition, the three extended some 440 million yen in loans to a company between May and September 1995 despite knowing the money might not be recoverable. In the end, about 410 million yen of that money was never repaid.
The defendants had told the court they had decided to window-dress the financial institution's earnings reports to avoid disclosing that it was in the red, out of concerns for the adverse effects it would have on the local economy. They denied violating their obligation to be careful about the bank's operations.
RCC plans to file lawsuits against the next of kin of the deceased defendants to have them pay their share of the money.
RCC took legal action against five former executives, of whom two settled by paying 5 million yen each.