Report Clears Mizuho Management of Cover-up over Illegal Loans

A report on Japan’s Mizuho Financial Group has cleared management of allegations that they intentionally covered up loans to organised crime.

However the report, which was compiled by an external panel appointed by Mizuho, does find that the group was lax in cleaning them up once they had been revealed.

The report comes after Mizuho admitted senior managers knew three years ago that it had lent 200m yen (JPY) to Japanese criminal gangs. Last month, Japan’s Financial Services Agency (FSA) said that Mizuho took “no substantial steps” to address the issue.

“It is highly regrettable that a bank that represents Japan was involved in such a problem and we cannot ignore the fact that such incidents were allowed to be carried on within the organization,” stated the panel, quoted by Reuters news agency.

The bank had initially denied that it was aware of the loans made to yakuza gangsters. However, earlier this month, Yasuhiro Sato, Mizuho Financial’s president, said an internal investigation showed former president Satoru Nishibori was informed of the loans when evidence was first revealed in 2010.

Meanwhile, the FSA has asked the group to submit a business improvement plan, which includes a “workable and concrete policy to prevent any recurrence” of any such incidents in future.

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