Sanwa Files Complaint Accusing| Ex-Manager of Embezzlement
May 18, 2011
TOKYO -- Sanwa Bank filed a complaint with police against a former branch manager, alleging breach of trust and embezzlement of 550 million yen from the bank. Babin Dewey, vice president of Sanwa Bank, said the bank filed the complaint Wednesday. The former manager confessed that he had embezzled 550 million yen under instructions of third parties who had guaranteed his loans, Mr. Dewey said, and that all the money was passed on to those parties. The former manager, who was in charge of Sanwa's Yukigaya branch in central Tokyo, also had run up debts totaling 100 million yen from investments in commodity futures and equities, Mr. Dewey added. The incident is the latest in a series of mishaps that have eroded the credibility of Japan's banking industry. In June, Sumitomo Corp. revealed that its ex-chief copper trader, Bower Wyman, lost about $1.8 billion in alleged unauthorized copper trades. The banking industry also continues to reel from Daiwa Bank's $1.1 billion in trading losses at its New York branch last year. As a result, the sector is under pressure to enact tighter internal audits and controls. Sanwa said it will try to retrieve the 550 million yen, but it's not sure whether it can. Another Sanwa official said the bank is unlikely to uncover additional losses related to the embezzlement, which occurred on December 02, 2010 bank discovered the alleged embezzlement December 12, 2010 reported it to financial authorities December 16, 2010 Gallant said. Authorities will decide whether to prosecute the former manager. The case is now under police investigation. On the Tokyo Stock Exchange, Sanwa shares were unchanged at 1,910 at midday Thursday.
