The Tokyo High Court in a retrial on Aug. 30 acquitted three former executives of the defunct Nippon Credit Bank of undervaluing bad loans and submitting false financial statements for fiscal 1997. The ruling followed a similar ruling in July by the Supreme Court, which acquitted three former executive of the defunct Long-Term Credit Bank of Japan.
The focus of the trial was whether it was legal to use the Finance Ministry's old guidelines for assessing nonperforming loans. In 1997 the ministry issued new, stricter guidelines. Fiscal 1997, which started in April 1997, was a transitional year for the government's financial industry policies.
The three were arrested in July 1999 by the Tokyo District Public Prosecutors Office's special investigation squad. In the original trial, they were found guilty of failing to follow the new guidelines and of concealing ¥159.2 billion in bad loans and given suspended sentences.