Mizuho management 'did not' cover up loans to gangsters

Rupert Wingfield Hayes explains that Japan is cracking down on gangsters taking out bank loans

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Mizuho Financial Group's management did not intentionally cover up loans to organised crime, a report has said.

However, the report made by an external panel appointed by Mizuho, said the firm was lax in cleaning them up.

The report comes after Mizuho admitted senior managers knew three years ago that it had lent 200m yen ($2m; £1.28m) to Japanese criminal gangs.

Last month, Japan's Financial Services Agency said Mizuho took "no substantial steps" to tackle the issue.

"It is highly regrettable that a bank that represents Japan was involved in such a problem and we cannot ignore the fact that such incidents were allowed to be carried on within the organisation," the panel was quoted as saying by the Reuters news agency.

Improvement plan

The bank had previously denied knowing about the loans to yakuza gangsters.

But earlier this month, Yasuhiro Sato, the group's president, said an internal investigation showed former president Satoru Nishibori was made aware of the loans when they first came to light in 2010.

Meanwhile, Japan's Financial Services Agency has asked the group to submit a business improvement plan, which includes a "workable and concrete policy to prevent any recurrence" of such incidents in the future.

It has also asked it to implement a compliance structure and enhance its internal auditing functions.

A spokeswoman for Mizuho told the BBC that a report on the business improvement plan will be released later on Monday.

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