The Supreme Court on Monday scrapped an earlier ruling that found three former executives of the defunct Nippon Credit Bank guilty over alleged window-dressing and sent the case back to a lower court for retrial.
Former NCB Chairman Hiroshi Kubota, 78, former NCB President Shigeoki Togo, 66, and former NCB Vice President Tadao Iwaki, 71, were convicted of submitting undervalued bad loans and false financial statements in conspiracy to conceal ¥159.2 billion in bad loans.
The Tokyo District Court in 2004 sentenced Kubota to 16 months in prison, suspended for three years, and the others to a year in prison, also suspended for three years. The ruling was upheld by the Tokyo High Court in 2007.
The focus of the lower court trials was on whether the defendants' use of old guidelines on assessing nonperforming loans was legal. New Finance Ministry guidelines were introduced shortly before the bank gave the statements in question for the year to March 1998.
The defense claimed that the bank's use of the old guidelines should not be considered illegal because the new guidelines then were ambiguous.