Mizuho execs to face punishment for deals with yakuza

In Other News - October 30th, 2013

More than 30 Mizuho Bank executives, including president Yasuhiro Sato, will face punishment for failing to address disreputable transactions with organized crime groups.

According to The Nikkei, Mizuho Bank president Yasuhiro Sato will likely be subject to a half-year suspension in pay. Takashi Tsukamoto, Sato’s predecessor, will step down as chairman but will resume his post as chairman of holding company Mizuho Financial Group Inc.

Satoru Nishibori, who was president when Mizuho became aware of the issue in 2010, will be asked to voluntarily return part of his salary, along with retired officials overseeing compliance at the time.

Officials involved with compliance may be reshuffled or dismissed, while managing executive officers and higher-ranked officials will be subject to pay cuts.

Mizuho will submit a business improvement plan to the Financial Services Agency on Monday.

Mizuho and consumer credit giant Orient Corp were found to have 230 transactions with criminal groups such as the yakuza, totaling around 200 million yen (about $2 million), according to the FSA.

The shady loans remained after they were discovered at the end of 2010 and were unresolved for more than two years.

Sato and Tsukamoto assert they were unaware about the loans until an FSA inspection revealed them in March.

“We consider this problem to very regrettable, and we want Mizuho to take steps immediately to improve its operations and run its businesses in a proper way,” Bank of Japan Gov. Haruhiko Kuroda said after a meeting of the central bank’s policy board earlier this month.

“I believe it is necessary for them to appropriately fulfill their responsibility to explain” what has happened.

By Maesie Bertumen

Image: Canadian Pacific/Flickr