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 Japan's banking regulator issued a second business-improvement order
to the country's second-largest lender on Thursday due to its
inaction and false reporting over loans it has extended to organized
crime members.
"We need to sweep away our silo mentality and change our corporate
culture," Mizuho President Yasuhiro Sato told a news conference.
The bank said Sato will give up his pay for 12 months starting from
last month, up from six months initially announced in October.
Asked whether he also intended to step down, Sato said: "It is my
responsibility to build a corporate governance system that is held
in high regard in global financial markets."
Mizuho said it will introduce board committees made up of outside
directors, and will also pick an outsider to chair its board. It
will propose these changes to shareholders when they meet in June,
it said.
The Financial Services Agency ordered Mizuho earlier in the day to
suspend some lending business with consumer credit companies from
January 20 to February 19. It admonished the bank for management and
organizational failures that led to the problems.
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The regulators conducted a rare second round of investigations at
Mizuho after the bank acknowledged giving the authorities false
information on how it handled the loan problem.
The FSA issued a business improvement order to Mizuho in late
September for failing to take action for two years after learning
that some of its loans had been made to "anti-social forces", a
euphemism for organized crime.
The 230 small transactions totaling about $2 million, mostly made up
of car loans, were made by Mizuho consumer-finance affiliate Orient
Corp <8585.T> and were among bulk loans the bank later bought from
Orient.
(Additional reporting by Noriyuki
Hirata; editing by Shinichi Saoshiro and Hugh Lawson)
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