Mizuho Financial Group said yesterday the chairman of its banking business and two other top executives will resign over the Japanese lender's failure to crack down on loans to organized crime.
Mizuho said its president, Yasuhiro Sato, will give up six months of pay but remain at his post. The bank also is appointing Tatsuo Kainaka, a former prosecutor and Supreme Court judge with a reputation for toughness, to be its chief compliance officer.
Sato and other top executives bowed deeply in apology - such gestures are a familiar sight in corporate Japan.
Besides the exit of Mizuho Bank chairman Takashi Tsukamoto, Mizuho's top compliance officer and its risk management director will resign on Friday. Dozens of Mizuho staff face salary cuts. Tsukamoto is also chairman of Mizuho Financial Group and retained that position.
"We caused a great deal of trouble and I want to express my deepest apologies," Sato said. "I am aware there are various opinions about this, but this is what was decided in this case," he said when asked if the penalties were too weak.
An outside panel reported yesterday that its probe found Mizuho lax in cleaning up more than 200 million yen (US$2 million) in lending, mostly auto loans, to clients associated with "anti-social" elements, a byword for organized crime.
Mizuho, Japan's No. 2 bank by assets, failed to do what was expected in reducing and preventing mob-related loans, the panel said, though it said the bank had not engaged in a deliberate cover-up.
The panel headed by former judge Hideki Nakagome, who also led an investigation into accounting fraud at camera and medical equipment maker Olympus Corp, called the lending "captive loans" acquired when Mizuho bought consumer finance company Orient Corp.
