• Japan mob loans scandal claims another lender

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    TOKYO, Japan: A major Japanese credit company said on Wednesday it had lent money to yakuza gangsters in a widening scandal that is sweeping through the country’s banking system.

    The admission by JACCS, a unit of Japan’s largest lender Mitsubishi UFJ Financial Group, is the latest in a growing line and comes as a government agency says it will buy shady loans to help companies keep their balance sheets clean.

    A spokesman for JACCS said an inspection of its books had revealed several instances of its lending cash to figures with links to Japan’s underworld.

    “Those cases were found linked to anti-social individuals after the initial screenings,” said the spokesman.

    He refused to give an exact number, but admitted it was “more than one but still single digit.”

    The scandal has gripped Japan’s banking sector since Mizuho Financial Group came under fire in September for the revelation that it had processed hundreds of loans worth about $2 million to mobsters.

    A panel of lawyers hired by Mizuho to probe the transactions said last week that “many officials and board members were aware of, or were in a position to be aware of, the issue.”

    “However, they failed to recognise it as a problem, believing that the compliance division . . . was taking care of it,” said the panel’s 100-page report.

    The company said 54 former and current executives would be punished, including Mizuho Bank Chairman Takashi Tsukamoto, who would step down from his post but stay on as head of the parent company.

    In the wake of that report, Japan’s financial watchdog said it would probe the country’s top three banks—Mizuho, Mitsubishi UFJ and Sumitomo Mitsui Banking Corp.—in an effort to weed out the practice of offering loans to the underworld.

    Like the Italian mafia or Chinese triads, the yakuza engage in activities ranging from gambling, drugs, and prostitution to loan sharking, protection rackets, white-collar crime and business conducted through front companies.

    The gangs, which themselves are not illegal, have historically been tolerated by the authorities, although recently efforts have been made to choke off their sources of funding.

    AFP

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