Mizuho Bank announced Monday that it will punish 54 present and former executives for lending money to organized crime groups via consumer lender Orient Corp.

The bank also announced preventive measures, including the appointment of a former Supreme Court justice as an outside director and a new committee on yakuza matters headed by President Yasuhiro Sato — as part of a business improvement plan submitted to the Financial Services Agency the same day.

But Sato denied the mega-bank tried to cover up mob loans or that its officials colluded with yakuza.

“Collusion, corruption or cover-ups were not observed,” Sato said at a news conference. “But sensitivity to the issue was low (among the executives), including me.”

Mizuho Bank Chairman Takashi Tsukamoto, who was president from June 2011 to July 2013, will step down but remain chairman of the bank’s parent, the Mizuho Financial Group. He will also forfeit all pay for six months, he said.

Sato will stay on as president but be docked six months’ pay as well, the bank said.

Tsukamoto’s predecessor, Satoru Nishibori, who was president when the bank became aware of the mob loans, will return some of his salary retroactively, the officials said. Nishibori is currently an adviser to the Mizuho Financial Group.

Lower down the totem pole, Sato said two executives in charge of compliance matters will be fired for not reporting illicit loans to the compliance committee.

The remaining 49 executives will be asked to take pay cuts ranging from 10 percent to 40 percent over one to three months, depending on their degree of involvement, Mizuho said. The punishments will all take effect Friday.

The mega-bank came under fire from regulators for failing to terminate lending — mostly in the form of car loans — to “anti-social groups.” It has also been heavily criticized for its ambiguous explanations of who had knowledge of the situation.

Mizuho initially told the FSA’s inspectors that only its compliance executives were aware of problem, but on Oct. 8 the bank said that its top managers, including Sato, were “in a position to be able to know.”

Sato said at Monday’s news conference that he himself attended four board meetings where reports mentioning some of the yakuza-linked loans were distributed. But he said the references only amounted to a few lines and were hidden so deeply in the documents, which covered many other issues, that he didn’t notice.

“We had a (false) understanding that they were not our own loans,” Sato said.

Earlier in the day, a third-party investigative committee put together by the bank and headed by lawyer Hideki Nakagome submitted its report on the scandal.

The panelists said that the executives’ lack of awareness was a major reason for the bank’s slow response to the loan scandal, and also cast blame on Orient’s lax screening of loan applicants.

A massive computer breakdown in March 2011 also diverted the bank’s attention by overwhelming it with complex compliance matters, the panel claimed.

The investigative panel, comprising three lawyers, was set up on Oct. 8 after the Financial Services Agency ordered Mizuho on Sept. 27 to submit a business improvement plan for failing to terminate lending to organized crime groups.

Based on interviews with 69 officials, email messages from the executives and minutes of board meetings, the panel said written reports mentioning the matter had been distributed at several board and compliance committee meetings.

It also said the bank’s top management, including Sato and Tsukamoto, “could have noticed” the references had they been paying more attention, panelist Gaku Ishiwata reckoned.

Part of the blame goes to the bank’s lack of vigilance against lending to the underworld, the panelists said.

To manage Orient’s loans, Mizuho in July 2010 established an internal policy of checking them after the fact to see whether the borrowers included antisocial elements, at a pace of every six months. Based on that policy, the bank’s compliance section checked the loans in December 2010 and told Orient to stop lending to individuals identified as mobsters.

The compliance section also submitted its results to top management. It carried out a post-loan check in June 2011 and reported the existence of any shady loans to the board of directors and the compliance committee, the panel’s report said.

But from the third time on, reports about loans to yakuza were no longer being made to top management, the report said, without clarifying exactly why the practice changed.

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