Shinginko Tokyo, a struggling bank set up by the Tokyo Metropolitan Government, will sue two top executives for ¥11 billion in damages allegedly caused by inept management, bank officials said Tuesday.
The executives are former Chief Executive Officer Yasumasa Nishi, 68, and former executive officer Mikio Tanji, 54.
Shinginko Tokyo was set up under the initiative of Gov. Shintaro Ishihara to aid small businesses. Nishi became chief of the bank's board in April 2004 after stints at Toyota Motor Corp. and trading house Toyota Tsusho Corp. He served as CEO from June 2004 to June 2007, while Tanji served as an executive officer from June 2006 to June 2007.
After an internal investigation, the bank published a report last March saying that former management bears heavy responsibility for its self-righteous way of running the company.
Ishihara has repeatedly said Nishi and other former executives should be held accountable.
Shinginko Tokyo began operating in April 2005 after the metropolitan government put up ¥100 billion in capital. It was touted as a source of unsecured loans for small businesses.
But its losses ballooned, apparently as a result of sloppy lending and subsequent attempts by a former employee to defraud it.
It racked up ¥101.6 billion in cumulative losses in the year ended March 2008.