Japan's AIJ chief admits loss cover-up, apologizes
By Chikafumi Hodo
TOKYO (Reuters) - The president of Tokyo-based money manager AIJ Investment Advisors admitted to Japanese lawmakers on Tuesday to covering up losses of $1.3 billion in clients' pension money, but said he had no intention of cheating his clients.
In his first public comment since the scandal broke in February, Kazuhiko Asakawa apologized to clients and the financial industry for the cover-up and said he had been confident that the losses could be recovered.
AIJ lost the funds through bad bets on equity and bond derivatives, wiping out the bulk of the $2.4 billion in client assets it was managing, Japan's financial regulator, the Financial Services Agency (FSA), said last week.
More than 90 corporate pension funds, mostly smaller ones, were invested with the money manager, which was handling pensions for about 880,000 people.
"I want to use this opportunity to apologize to all beneficiaries who believed in our funds and purchased them," Asakawa told a financial committee of parliament.
Pensions are a sensitive political issue in Japan, a rapidly ageing society that is grappling with how to pay for a swelling population of retirees.
Asakawa said he personally produced a falsified investment report by inflating the asset size and investment results to cover up the fact that his fund was running at a loss.
"I didn't want to return the money to clients at a loss," said Asakawa, dressed in a dark blue suit, in response to a question from the committee. "I'm deeply sorry, but I had absolutely no intention to cheat our clients from the beginning." Continued...