Mizuho's top management knew of organized crime loans
By Taiga Uranaka
TOKYO (Reuters) - Officials at Mizuho Financial Group (8411.T: Quote), Japan's second-biggest bank, admitted top management knew at least three years ago about loans to criminal groups, highlighting the entrenched position of organized crime in the Japanese business world.
Bowing deeply for the cameras in the second such ritual of contrition in less than a week, top Mizuho officials reversed their previous position that knowledge of the loans had extended only to compliance officers.
Mizuho President Yasuhiro Sato told a news conference on Tuesday that an internal probe this week showed former president Satoru Nishibori was made aware of the loans in 2010. Nishibori served as president from 2009 to 2011 and is now an adviser to the bank. He was not made available by Mizuho to comment.
"We lacked enough awareness about the matter of anti-social forces," Sato said, using a common euphemism for organized crime. "We have to criticize ourselves for that."
The latest revelation is sure to prompt further criticism of the Japanese megabank. More broadly, it is the latest organizedme has long been entrenched in Japan's business and political circles.
In 1997 for example, Nomura Securities Co executives were arrested for payoffs to extortionists and the country's biggest bank, Mitsubishi UFJ Financial Group Inc (8306.T: Quote), also was shown to have had transactions with criminal elements in 2007. More recently, Japan's justice minister in the previous government resigned last October over his past ties to a crime syndicate.
The government in the past three years has cracked down on business ties to the "yakuza" underworld with a law that criminalizes payments to designated organized crime outfits, increasing the pressure on legitimate businesses not to associate with the groups.
The mob's pervasive influence is even complicating one of Prime Minister Shinzo Abe's economic-revitalization plans to legalise casinos in a legalizebid to ramp up tourism revenue. The plan includes creating a Las Vegas-style regulator to try to shut out the mob, according to a draft reviewed by Reuters last week. Continued...