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Suruga Bank chairman to resign over illicit loan scandal

Suruga Bank Chairman Mitsuyoshi Okano

TOKYO -- The chairman of Suruga Bank Ltd., which has been rocked by an illicit loan scandal, expressed his intention to resign to senior executives of the financial institution on Aug. 27, according to people close to the arrangement.

Mitsuyoshi Okano, 73, who has been at the top of the management of the regional bank headquartered in the central Japanese prefecture of Shizuoka for over 30 years as a member of the founding family, is likely to announce his resignation after a third-party panel investigating the scandal announces the result of its probe possibly this week.

Okano's move comes amid growing realization that the chairman bears grave responsibility for the management of the bank by the Financial Services Agency (FSA) and the third-party panel.

Suruga seems to be considering punishing other senior executives, including President Akihiro Yoneyama, 52, and will try to rebuild its corporate governance structure in response to administrative punishment expected to be dished out by the FSA, aiming to clean up house.

Suruga Bank has loaned some 203.5 billion yen to 1,258 borrowers who planned to manage shared houses in the Tokyo metropolitan area. Up to around 100 million yen was provided per structure. Suruga employees rampantly doctored documents showing applicants' savings and salaries so that the loans could be granted to these applicants. Okano told the firm's June shareholders meeting that he would like to take responsibility for what happened as part of the management of the bank.

The FSA believes a senior Suruga managing director in charge of sales operations is at the center of the irregular loan debacle, but is also considering ordering to suspend some of the operations at the bank as the company failed to stop the misconduct.

Okano became the bank's president in 1985. He continued to control the bank as chairman and CEO after Yoneyama took over the presidency in 2016.

(Japanese original by Takashi Narumi, Business News Department)

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