Mizuho Punishes Officials for Crime Loans as Chairman Quits (1)
Mizuho Financial Group Inc. (8411) cut pay for President Yasuhiro Sato and said the chairman of its lending unit will step down after Japan's third-biggest bank by market value failed to address loans made to crime groups.
Takashi Tsukamoto will give up his role as chairman of Mizuho Bank Ltd. while keeping the post at the parent company, the Tokyo-based bank said in a statement today. He and Sato will forgo pay for six months and 52 other current and former executives will be penalized.
Sato bowed in apology at a news briefing in Tokyo, hours after submitting a report to the Financial Services Agency detailing how he plans to prevent transactions with yakuza crime syndicates. Lawyers commissioned by Mizuho to investigate the loans earlier said the issue reflected a failure in internal controls rather than efforts to deliberately mislead regulators.
Sato said that while he and top managers deeply regret the incident, he never considered stepping down. He came up with the penalties along with three outside members of the parent company's board, he said.
Shares of Mizuho closed 2.5 percent higher at 209 yen before Sato spoke, paring their decline since the regulator ordered the bank to improve compliance a month ago for failing to act on 200 million yen ($2 million) in credit extended to members of crime groups through its Orient Corp. (8585) affiliate.
FSA Action
Financial Services Minister Taro Aso said he received the bank's business improvement report today. The government will examine the contents and decide any punishment taking into account the findings of the panel of lawyers, he said.
The three-member committee, led by former High Court Chief Justice Hideki Nakagome, said earlier today that Mizuho didn't have clear disclosure rules on issues relating to criminal organizations. Communication between compliance divisions and other sections of the company was lax, it added.
There was no evidence that issues relating to the loans were discussed at compliance and board member meetings attended by Sato, 61, and Tsukamoto, 63, according to the report.
Sato told reporters that he can't remember seeing any reference to crime loans through Orient in reports distributed at executive meetings. Earlier this month, he said he was in a position to have found out about the transactions in the reports.
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Takahiko Hyuga in Tokyo at thyuga@bloomberg.net
To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net
Post a Comment for "Mizuho Punishes Officials for Crime Loans as Chairman Quits (1)"