Major Japanese Bank Files Embezzlement Charges Against Former Manager
TOKYO (AP) _ Sanwa Bank Ltd., a major Japanese commercial bank, said Thursday it filed a breach of trust charge against a former official who embezzled $5.05 million.
The scandal is yet another embarrassment for Japan’s powerful banks, which have drawn widespread criticism about shaky risk-management methods.
A former manager of Sanwa’s Yukigaya branch in central Tokyo had run up debts totaling $917,000 from investments in commodity futures and stocks, Sanwa vice president Junichiro Kojima said.
The man, who the bank would not identify, confessed that he embezzled the money on the instructions of third parties who had guaranteed his loans and all the money was passed to those parties, Kojima said.
The embezzlement occurred in March and was discovered by the bank and reported to financial authorities in April, Kojima said. Sanwa filed the breach of trust charge and fired the manager Wednesday.
Police are investigating the case and have filed no charges against the former manager.
At a news conference Thursday, Sanwa executives bowed deeply in apology but insisted the losses stemmed from the misdeed of one person.
``We realize what has happened is serious and we need to do more in personnel management,″ said Hidehito Mori, spokesman for the Osaka-based bank.
Earlier this year, Daiwa Bank pleaded guilty in the United States to hiding $1.1 billion in losses caused by a trader at its New York branch. Last month, the U.S. unit of the Long-Term Credit Bank of Japan was fined $1 million after a trader at the bank allegedly conducted unauthorized securities transactions and faked records to cover up the trades.