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Bank of Japan Punishes Employees

April 10, 1998

TOKYO (AP) _ Japan’s central bank punished 98 employees today in a bribery scandal that has shaken the country and its powerful bureaucracy. Penalties ranged from reprimands to temporary salary cuts.

The scandal centers on favors granted in exchange for lavish entertainment. In just a few months, it has claimed the jobs of two ranking Finance Ministry officials, including the finance minister. Four other ministry officials have been arrested.

Two more Finance Ministry officials, as well as an executive at a public corporation and a national lawmaker, hanged themselves rather than face questioning by prosecutors.

The Bank of Japan, however, was considered above reproach and its involvement shocked the country. After a senior Bank of Japan official was arrested on bribery charges, central bank head Yasuo Matsushita tendered his resignation _ an unprecedented act for a Bank of Japan governor.

The bank said today that 98 were reprimanded for receiving excessive entertainment from financial institutions which have regular contacts with the central bank. Some were found to have leaked information to the institutions, it said.

The most severely punished were five officials who received salary cuts of 20 percent for up to five months.

The penalties mark the end of an internal probe of 600 employees investigated for improper conduct over the past five years.

The bank said 36 employees are to be reprimanded with written notices signed by Governor Masaru Hayami, who replaced Matsushita last month.

Though Matsushita was not implicated in the scandal, it is common in Japan for leaders of institutions to resign when subordinates have been accused of wrongdoing.

Hayami, the bank’s two deputy governors and four executive directors will voluntarily take a 20 percent pay cut for one month.

Japan’s Asahi Bank also announced today that it would punish officials over the bank’s involvement in the entertainment scandal.

The major commercial bank said it will cut salaries for its chairman and president by 30 percent for three months and announced demotions and cuts in salaries for other officials directly involved in the scandal.

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