Mizuho gangster loans down to failure in internal controls

Sunset in Tokyo, Japan

Mizuho Financial Group's investigators said a probe into loans made to gangsters uncovered a failure in internal controls rather than efforts by the bank to deliberately mislead regulators.

Bloomberg reports that there was no evidence of a coverup and President Yasuhiro Sato didn’t know about the transactions even after they were highlighted in documents distributed in executive meetings, a panel of lawyers hired by the bank said in a report Monday.

The findings may ease pressure on Sato, who is set to outline changes to the board today after submitting a report to the Financial Services Agency on how he aims to prevent more loans to yakuza crime syndicates.

'The report will definitely help Sato stay on as Mizuho’s president', said Yoku Ihara, an investment adviser at Retela Crea Securities Co. in Tokyo. 'The third-party panel accepted Mizuho’s explanation that Sato didn’t know about the loans'.

The three-member committee, led by former High Court Chief Justice Hideki Nakagome, said Mizuho didn’t have clear disclosure rules on issues relating to criminal organizations. Communication between compliance divisions and other sections of the company was lax, it added.

To access the complete Bloomberg article hit the link below:

Mizuho Probe Concludes Controls Failure Rather Than Coverup

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