To ensure that no more loans are made to organized crime groups, Mizuho Bank is considering setting up a special organization and bringing in an outside board member to strengthen supervision, sources said Sunday.
The compliance division of the banking unit of Mizuho Financial Group Inc. has been in charge of preventing illicit lending, but the bank now sees the need for an independent organization, the sources said.
After an inspection uncovered 230 transactions with “anti-social” groups involving more than ¥200 million, the Financial Services Agency ordered Mizuho Bank on Sept. 27 to improve its operations.
The plan to set up a special organization will be included in a business improvement plan that the bank has been ordered to submit to the agency by Oct. 28, according to the sources.
The new organization will closely screen loan requests to prevent lending to organized crime groups.
Lawsuit against execs
An individual shareholder has asked Mizuho Financial Group Inc. to sue 19 former and current executives for ¥1.17 billion in damages over its banking unit’s shady transactions with yakuza groups, it was learned Saturday.
The shareholder, a 40-year-old Osaka resident, sent a letter to an auditor of Mizuho Financial Group on Friday demanding that the suit be filed, according to a lawyer representing him.
The man warned that he may bring a lawsuit on behalf of other shareholders if the auditor does not meet his request within 60 days. The shareholder, whose name was not disclosed, claims Mizuho Financial Group should be held liable for not supervising Mizuho Bank appropriately.
It is the first shareholder move to try to hold the mega-bank’s senior management accountable since the revelation that Mizuho Bank has extended loans to yakuza and other “anti-social” elements through affiliated nonbank lender Orient Corp., and left the issue unattended for more than two years.
The 19 executives targeted by the shareholder served on the board of Mizuho Financial Group after July 2010, when then-Mizuho Bank President Satoru Nishibori is said to have known about the problem.
They include Mizuho Financial Group President Yasuhiro Sato, who concurrently serves as Mizuho Bank president, and group Chairman Takashi Tsukamoto, the bank’s chairman.
The compensation sought includes ¥1 billion in damages caused to the Mizuho group by the pasting its credibility has taken and another ¥50 million in costs related to setting up an independent panel to probe the loans.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.