Kimura made profit 'top priority' / Arrested banker characterized as money-hungry, law-bending autocrat

The Yomiuri Shimbun

Former Incubator Bank of Japan Chairman Takeshi Kimura, center, poses with Heizo Takenaka, left, former state minister in charge of economic and fiscal policy, and former Bank of Japan Governor Toshihiko Fukui on the cover of the magazine Financial Japan.

Former Incubator Bank of Japan Chairman Takeshi Kimura, who was arrested Wednesday along with four others on suspicion of violating the Banking Law, was known for his autocratic style and for placing excessive emphasis on profit, former officials of the bank said.

Kimura, 48, worked for the Bank of Japan from 1985 to March 1998, after which he established his own financial consulting firm and established a profile as an expert on international finance by appearing on TV programs and in print media.

He was known to speak boldly to powerful figures. At a meeting in the Prime Minister's Office in September 2001 initiated by then Prime Minister Junichiro Koizumi, Kimura demanded that then Financial Services Agency Commissioner Shoji Mori dispose of nonperforming loans, asking, "Do you really grasp the full extent of banks' suffering from bad loans?"

In October 2002, Kimura became an adviser to the FSA at the request of Heizo Takenaka, then state minister in charge of economic and fiscal policy under the Koizumi administration. Kimura established a reputation as a hardliner who aggressively promoted the disposal of bad loans.

Kimura established the Incubator Bank of Japan in April 2004, promising to support any firms that could energize the nation. But according to a former official of the bank, when the bank received only a sluggish flow of loan applications, Kimura put profit before legal compliance.

After he became president of the bank in January 2005, power apparently went to Kimura's head. A former executive of an affiliate firm of the bank said Kimura would not tolerate his authority being questioned, and recalled once being grilled by Kimura over rumors that someone had criticized his business tactics.

The former executive described Kimura as an "autocratic person who mercilessly cast out anyone who opposed him."

===

E-mail evidence deleted

Hundreds of e-mails deliberately deleted by Incubator Bank of Japan executives contained details of transactions between the bank and member firms of a group chaired by Kimura, sources said.

The Metropolitan Police Department is investigating whether the deleted e-mails contained specifics about dubious loans to small and midsize companies belonging to the group, Incubator Network for SMEs.

According to sources close to Incubator Bank of Japan, the deleted e-mails provided a clear picture of the bank's loans to Incubator Network firms, and details of funds transfers between the member firms.

An official of one member firm told The Yomiuri Shimbun that poor credit was not a hindrance for member firms seeking loans from Incubator Bank of Japan--the loan was simply directed via another member firm with healthy credit, he said.

The official said bypass transactions of this kind could be deemed illegal.

Sources said Incubator Bank of Japan executives obstructed the Financial Service Agency's audit by intentionally deleting e-mails to prevent inspection.

The bank is believed to have received a commission of 45.7 percent, much higher than the legal limit of 29.2 percent, concerning the purchase of loans from leading lender SFCG Co., now undergoing bankruptcy proceedings.

The MPD searched the bank's head office and the offices of some of its clients on June 11, after criminal charges were filed by the FSA earlier that day.

Police have been investigating Kimura's involvement in the alleged obstruction of the audit by analyzing documents seized during the search.