TOKYO (AP) — Japan’s trade minister is voluntarily returning two months of his salary after a government-backed lender reported $2.3 billion in shady loans based on faked documents that enabled companies to take advantage of government-funded low interest loans. Hiroshige
TOKYO (AP) — Japan’s trade minister is voluntarily returning two months of his salary after a government-backed lender reported $2.3 billion in shady loans based on faked documents that enabled companies to take advantage of government-funded low interest loans.
Hiroshige Seko, who heads the Ministry of Economy, Trade and Industry, mentioned the action at a conference Thursday while discussing problems with corporate governance at Japanese companies.
The ministry is in charge of overseeing Shoko Chukin Bank, whose president, Kenyu Adachi, said Wednesday that he would step down to take responsibility for the more than 4,600 irregular actions involving at least 265 billion yen ($2.3 billion) at the lender for small and medium-sized companies.
Shoko Chukin said an investigation launched after a whistleblower reported the problem found the improper actions occurred in 100 of its offices and involved 444 employees. Further cases were possible, it said.
Emergency financing such as the loans in question account for a third of Shoko Chukin’s lending. Employees were encouraging the loans to help improve the lender’s profits.
The scandal surfaced at a time when Japan is already confronting a slew of problems with doctored inspections by automakers and major metals company Kobe Steel.
Seko told a conference organized by The Economist that he hoped such issues were not typical and only “irregularities.” But he acknowledged that despite efforts to impose better corporate stewardship codes and improve management, problems persist.
“The road is still long. There is much room for improvement in corporate governance in Japan,” Seko said.
