ID :
12995
Sat, 07/19/2008 - 10:05
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Shortlink :
https://oananews.org//node/12995
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Guilty verdict scrapped, 3 ex-bankers found not guilty by top court
TOKYO, July 19 Kyodo - The Supreme Court on Friday acquitted three former top executives of the failed Long-Term Credit Bank of Japan, who were indicted for window-dressing the bank's financial statements to conceal massive bad loans and authorizing illegal dividend payments, overruling the lower courts' guilty verdict.
The three are Katsunobu Onogi, 72, a former president of LTCB, now Shinsei
Bank, and two former LTCB vice presidents, Masami Suda, 68, and Yoshiharu Suzuki, 71.
The focus of the trial was whether it was justifiable for the bankers to employ in the bank's financial report for the 1997 business year the old accounting standards -- in lieu of the new, more transparent rules in place by then -- in appraising the bank's assets.
The defendants pleaded not guilty, arguing that the new asset-evaluation
methods presented by the Finance Ministry in 1997 were merely a guideline for
financial institutions as they were in a transitional period and there was
nothing illegal about processing financial statements using the old standards.
Ruling in favor of the defendants, Ryoji Nakagawa, presiding justice at the top
court's second petty bench, said the new rules ''merely represent a broad
guideline and lack clarity.''
The top court has found nothing illegal in LTCB's accounting procedure, the
justice said, noting that 14 of the country's 18 other major banks at that time
had adopted similar accounting methods.
Meanwhile, the Supreme Court issued a separate decision Friday in a civil suit
against seven former LTCB executives, turning down demands by the state-run
Resolution and Collection Corp. that they pay 1 billion yen in damages over
payment of dividends.
The three were found guilty at the Tokyo District Court in 2002 for authorizing
the bank's financial report for fiscal 1997 through March 1998 for presentation
to the Finance Ministry, undervaluing bad loans of around 580 billion yen, in
violation of the securities and exchange law, which was renamed the financial
products trading law.
Onogi was sentenced to three years in prison, suspended for four years, while
Suda and Suzuki received sentences of two years in prison, suspended for three
years, by the district court.
The bank did not write off or build reserves for possible loan losses against
around 310 billion yen in loans deemed irrecoverable, the district court found.
The defendants also authorized about 7.1 billion yen in dividend payments to
shareholders in June 1998 after falsely declaring that the bank made a profit
of 46 billion yen, violating the Commercial Code, according to the ruling.
In June 2005, the Tokyo High Court upheld the lower courts' decision, prompting
the three to file an appeal with the top court.
LTCB collapsed under the weight of a mountain of bad loans and was placed under
state control in October 1998. It later re-emerged as Shinsei Bank under the
leadership of a consortium led by U.S. investment fund Ripplewood.
==Kyodo
The three are Katsunobu Onogi, 72, a former president of LTCB, now Shinsei
Bank, and two former LTCB vice presidents, Masami Suda, 68, and Yoshiharu Suzuki, 71.
The focus of the trial was whether it was justifiable for the bankers to employ in the bank's financial report for the 1997 business year the old accounting standards -- in lieu of the new, more transparent rules in place by then -- in appraising the bank's assets.
The defendants pleaded not guilty, arguing that the new asset-evaluation
methods presented by the Finance Ministry in 1997 were merely a guideline for
financial institutions as they were in a transitional period and there was
nothing illegal about processing financial statements using the old standards.
Ruling in favor of the defendants, Ryoji Nakagawa, presiding justice at the top
court's second petty bench, said the new rules ''merely represent a broad
guideline and lack clarity.''
The top court has found nothing illegal in LTCB's accounting procedure, the
justice said, noting that 14 of the country's 18 other major banks at that time
had adopted similar accounting methods.
Meanwhile, the Supreme Court issued a separate decision Friday in a civil suit
against seven former LTCB executives, turning down demands by the state-run
Resolution and Collection Corp. that they pay 1 billion yen in damages over
payment of dividends.
The three were found guilty at the Tokyo District Court in 2002 for authorizing
the bank's financial report for fiscal 1997 through March 1998 for presentation
to the Finance Ministry, undervaluing bad loans of around 580 billion yen, in
violation of the securities and exchange law, which was renamed the financial
products trading law.
Onogi was sentenced to three years in prison, suspended for four years, while
Suda and Suzuki received sentences of two years in prison, suspended for three
years, by the district court.
The bank did not write off or build reserves for possible loan losses against
around 310 billion yen in loans deemed irrecoverable, the district court found.
The defendants also authorized about 7.1 billion yen in dividend payments to
shareholders in June 1998 after falsely declaring that the bank made a profit
of 46 billion yen, violating the Commercial Code, according to the ruling.
In June 2005, the Tokyo High Court upheld the lower courts' decision, prompting
the three to file an appeal with the top court.
LTCB collapsed under the weight of a mountain of bad loans and was placed under
state control in October 1998. It later re-emerged as Shinsei Bank under the
leadership of a consortium led by U.S. investment fund Ripplewood.
==Kyodo
