日本振興銀捜索 偽りだった「中小企業の味方」

The Yomiuri Shimbun (Jun. 15, 2010)
Small firms' 'protector' betrayed expectations
日本振興銀捜索 偽りだった「中小企業の味方」(6月14日付・読売社説)

A bank trumpeted as a "protector" of small and midsize companies when it was established in 2004 has been smeared by allegations of criminal irregularities.

The Financial Services Agency recently filed a criminal complaint against Incubator Bank of Japan, which specializes in providing loans to small and midsize firms. This prompted the Metropolitan Police Department to search the bank's head office and other locations last week on suspicion the bank had sabotaged an audit by the FSA, a violation of the Banking Law.

The FSA was quite right to file a complaint. We hope the police will thoroughly investigate the alleged wrongdoing and uncover the whole truth.

Last month, the FSA ordered the bank to suspend part of its business for about four months after alleging its operations gravely violated the law. The agency followed this up with its criminal complaint last week.

The financial watchdog's additional action suggests it believes the bank's operations were so malicious that an administrative punishment alone would not suffice.

Former Bank of Japan official Takeshi Kimura and members of the Tokyo Junior Chamber International established the bank in 2004.

By setting its interest rates higher than those offered by major commercial banks and providing loans without secured collateral, the bank touted itself as a financial institution catering to startup businesses with high growth potential.


Off to a bad start

However, the bank quickly ran into trouble. A string of executives resigned one after another due to differences over management policy.

Kimura became president in 2005 and started overseeing the bank's management by himself. The bank ran a profit for three consecutive business terms starting with the year to March 2007, but fell into the red in the term ended March 2010 with a loss of more than 5 billion yen. Kimura resigned in May to take responsibility for the bank's deteriorating performance.

Question marks hung over the feasibility of the bank's business model of concentrating on loans to small and midsize firms. On top of that, the FSA investigation has revealed the bank's operations actually differed considerably from the management principles it had put forward.

For example, the bank allegedly purchased loan claims from financially strapped moneylenders while collecting commissions from them, and then asked these moneylenders to buy the loans back about a month later.


On a par with loan sharks

On the surface, this appears to be a simple transaction of loan claims. But the commission--which for all intents and purposes was interest--translated into an annual rate of 46 percent, far above the legally allowable ceiling. This would not be out of place in a loan-shark operation.

Moreover, the bank allegedly tried to dominate management of its clients by pressing them to have a majority of seats on their board of directors occupied by people the bank recommended. If the clients refused, the bank allegedly demanded increased collateral.

The bank also is suspected to have covered up other irregularities, including the deletion of e-mails detailing its business transactions from the bank's server.

Kimura was an adviser to the FSA from October 2002 to August 2003 under Heizo Takenaka during the administration of Prime Minister Junichiro Koizumi. He was deeply involved in the nation's financial administration.

Kimura has resigned from the bank's management lineup. But he bears heavy responsibility for the alleged misconduct because he was closely involved in the bank's management for years as president and chairman.

Kimura must cooperate fully with the police in their investigation. We also urge him to come clean in public by holding a press conference or using other avenues to speak about the bank scandals.

(From The Yomiuri Shimbun, June 14, 2010)
(2010年6月14日01時45分 読売新聞)

by kiyoshimat | 2010-06-15 06:53 | 英字新聞

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