Incubator Bank, execs admit obstructing audit

Kyodo News

Incubator Bank of Japan and three former top executives admitted Wednesday in the Tokyo District Court to obstructing an audit by the Financial Services Agency.

The failed bank’s former chairman, Takeshi Kimura, 48, currently in the midst of pretrial proceedings, is expected to follow suit.

The defendants who acknowledged their guilt at the opening of their trial Wednesday are former President Tatsuya Nishino, 55, and two former senior executive officers, Hiroyuki Yamaguchi, 49, and Nobuhiro Sekimoto, 38.

They are charged with colluding to delete 723 potentially incriminating e-mail messages from the bank’s computer servers when the FSA inspected the bank between June 2009 and last March.

The bank, which specialized in loans to small firms, is accused of dubious practices aimed at circumventing regulations in connection with large sums of loans it extended and also of concealing nonperforming loans by transferring loan money within a network of the bank’s more than 110 corporate borrowers.

Another reason for erasing the e-mails was to conceal an irregular loan claims transfer to the bank from another failed moneylender, SFCG Co., the prosecutors said.