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(Bloomberg) — Custody Bank of Japan Ltd. will create a second panel of outside lawyers to investigate allegations of misconduct by its more sensible former executive, according to other people familiar with the matter.
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The move through the bank, whose largest shareholders are Sumitomo Mitsui Trust Holdings Inc. , comes after the regulator deemed the initial investigation unsatisfactory through a panel in January.
In June, the bank said it had observed misplaced conduct through an unnamed former senior executive and in contact with the government for possible criminal offenses. The executive is Yoshikazu Tanaka, who served as the company’s chairman until the end of December, Bloomberg reported. Tanaka has denied any wrongdoing.
The Financial Services Agency has ordered Custody Bank and Sumitomo Mitsui Trust to report on the matter, Bloomberg reported in July. Custody Bank protects about 652 trillion yen ($4. 4 trillion) in assets for investors.
After receiving the reports, the regulator uncovered disruptions in the bank’s initial investigation, adding that the panel did not interview Tanaka, said the people, who asked not to be known because the data is confidential. The FSA asked him to conduct the investigation with a new panel. To ensure some objectivity, they added the resources.
FSA and Custody Bank officials declined to comment.
Custody Bank is 33. 3% owned through Sumitomo Mitsui Trust and 27% through Mizuho Financial Group Inc. , according to the custodian’s disclosure report. The rest is held through Resona Bank Ltd. et major Japanese insurers.
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