Mizuho Bank’s loans to yakuza and other shady individuals through its group credit company Orient Corp. may be just the tip of the iceberg as corporate Japan struggles to break off its long-held ties with organized crime.

On Monday, Mizuho released the results of a third-party investigation report in which the mega-bank blamed “lax awareness” for its failure to take action on 228 mob-linked loans for cars and electronics totaling ¥200 million.

As part of a business improvement plan submitted to the Financial Services Agency, Mizuho also announced the punishment of 54 executives and vowed to take preventive steps to avoid lending to “anti-social elements,” which include not only gangsters but also “sokaiya” racketeers and convicted fraudsters.

But neither the 102-page report by the investigative panel nor the bank’s business improvement plan address the structural problems plaguing businesses in Japan, experts say.

Companies have only recently begun to take active steps to sever their ties with the underworld, and then only for ethical reasons.

The law has long been lenient on business dealings with mobsters, and it was only in 2007 that the government issued guidelines urging businesses to cut ties with anti-social elements. These guidelines are not legally binding.

Based on the guidelines, the Japanese Bankers Association instructed the nation’s banks in 2009 to create an “anti-gangster” clause in their contracts.

This clause mandates that customers opening accounts or starting business deals with banks declare in advance that they are not a member of a criminal group, and states that banks can terminate a contract when it becomes clear a customer is indeed linked to the mob.

This led to the creation of prefectural ordinances across the country between 2009 and 2011 aimed at preventing a variety of private-sector dealings with mobsters and their associates.

Most of the prefectural ordinances, however, fall short of penalizing businesses that fail to comply, and are vague in their language, said Aki Tsurumaki, a lawyer knowledgeable about gangster issues.

“The Tokyo ordinance, for example, says businesses should not engage in deals that encourage gangsters’ activities,” Tsurumaki said. “But it is hard to know what constitutes encouragement.”

He said that because these anti-mob measures came into effect so recently, Mizuho is probably not alone in grappling with what to do with loans that were made before the anti-gangster clause was introduced. The clause cannot be applied retroactively.

“It is easy to imagine that there are massive volumes of outstanding contracts that (financial institutions) are unable to cancel immediately,” he said.

Nobuo Gohara, a former prosecutor and now a lawyer who specializes in compliance matters, said Mizuho’s investigation panel should have been more forthcoming about this legal background.

Orient, in an Oct. 16 report to the Ministry of Economy, Trade and Industry, said a majority of the mob-linked loans were approved before the company introduced the anti-gangster clause in March 2011, making cancellations tricky.

“The third-party report just follows what Mizuho executives have said and adds a pinch of criticism, but it fails to delve into the root of the problem,” Gohara said.

He added that because there’s no legal recourse for many of the mob-linked contracts, some credit card companies are now trying to cancel deals with problem individuals “through whatever means available.”

“Some companies are trying to cancel contracts if those customers miss one payment, only by a day or two,” Gohara said. “Others try to find any false statement in the contracts that they can use as a reason to cancel them. These issues, which plague the entire financial sector, should have been brought up in Mizuho’s report. Then the bank executives would have been genuinely accountable for the scandal. Instead, the way they dealt with the issue was very superficial, failing to shed light on the real problem.”

The Mizuho report also fails to explain whether the cars that the gangsters supposedly bought through the loans were sold to other parties, or whether the loans involved fictional purchases, thus becoming a source of cash for the mob.

While Mizuho officials have denied such scenarios, Tsurumaki said the bank and Orient should investigate how their loans were used.

“If such things come to light, the bank would be a victim of fraud or a collaborator of underworld crimes,” he said. “A look at the report gives us no clue as to whether the bank’s investigation covered such questions.”

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