Further pain for Yasuhiro Sato, President of the newly merged Mizuho Bank, following his preemptive interview in the Nikkei Business magazine last month (summarised by Rudlin Consulting here) which was shortly followed by Mizuho being the subject of a business improvement order.
Mizuho had said previously,in response to investigations by Japan’s Financial Services Authority, that its executives had no previous knowledge of loans to organised crime via the old Mizuho Bank (retail side)’s subsidiary, Orient Corp. Sato has now had to admit that his predecessor-but-one, Satoru Nishibori, had been told.
A Nikkei editorial says “the sudden about-face, made at a press conference Tuesday, underscores the sloppiness with which Mizuho is handling the matter. The news is unsettling because public trust is a bank’s most important asset.” It does go on, however, to point out that Mizuho is not alone in making such loans.
Sato has felt obliged to resign from all public positions, including his role as a private-sector member of the Council for Industrial Competitiveness, to focus all his energy on cleaning up the mess.
Orient Corp was a subsidiary of one of the original banks that Mizuho was formed from, Daiichi Kangyo Bank, and is of course therefore staffed by “alumni” of DKB. Sato comes from the Industrial Bank of Japan, one of the other original banks, and would therefore not have many back routes into DKB’s subsidiaries, possibly also “respecting” their expertise in consumer financing, the same way Kao “respected” Kanebo’s cosmetics expertise.
A third party committee is being set up to investigate further and in the meantime it’s pay cuts and much deep bowing all round…
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