Bank Resignations 'sneaky', Says Hashimoto
Sydney Morning Herald
Friday May 23, 1997
Japan's Prime Minister, Mr Ryutaro Hashimoto, yesterday threatened to intervene in the Dai-Ichi Kangyo Bank (DKB) scandal following disclosures that the bank lent tens of millions of dollars in unsecured loans to sokaiya racketeers.
Mr Hashimoto bitterly criticised the Finance Ministry for failing to detect a series of shady loans advanced by the bank to two racketeers for the purchase of 300,000 shares in four brokerage companies and real estate investments. The Prime Minister also rounded on DKB's senior management, accusing it of "sneaky" behaviour by deciding to resign before the scandal had been fully investigated by prosecutors and before they had given an account of their decisions.
"Their resigning does not settle the problem. They should face up to the case until investigations make head way," he said.
Even the Finance Minister, Mr Hiroshi Mitsuzuka, demanded that the bank's management remain in place to clarify the circumstances surrounding the shady loans. DKB is Japan's second-largest commercial bank in terms of deposits.
"Resignations do not mean they have done their duty," the minister said, referring to the decision by seven of the bank's directors to stand down.
They include the president, Mr Katsuhiko Kondo, and the chairman, Mr Tadashi Okuda. DKB announced yesterday that two of its vice-presidents - Mr Ichiro Fujita and Mr Yoshiharu Mani - would take over the roles of president and chairman respectively.
DKB has promised to clean up the scandal but more damaging disclosures are expected. Prosecutors are still interrogating Ryuichi Koike, 54, and his 52-year-old brother Yoshinori after arresting them earlier in the week on suspicion of receiving $500,000 in pay-offs from Nomura Securities. According to prosecutors, DKB lent the brothers a staggering $60 million.
All the loans were placed in an account at the bank's Roppongi branch in Tokyo's notorious nightclub district.
Although only $80,000 had been repaid, the bank made no attempt to recover the loans which had been paid progressively since 1989.
DKB has officially said very little about the allegations.
© 1997 Sydney Morning Herald