OSAKA -- Police arrested three former executives of a failed credit union here Tuesday for allegedly extending about 75 million yen in loans to a construction company without taking collateral.
Arrested were Tatsuji Sato, 81, the former head of Sanpuku Credit Union, Tatsuhiko Sato, 55, Tatsuji's son and former executive director of the credit union, and Akihiko Sato, 51, a former managing director of the institution. Police also arrested Sadami Kuroki, 51, president of Koroki Kensetsu (Construction) Co.
The credit union executives extended about 75 million yen in loans to Kuroki Kensetsu via a company affiliated with the contractor in July 1995, with no prospect that the money would be returned, police said.
The three told police that they had no intention of committing breach of trust, saying they thought it would be possible for the construction company to pay back the loans in five years' time.
By November 1996, the credit union had extended about 3.4 billion yen to Kuroki Kensetsu, the credit union's biggest customer, and most of the loans had soured.
Sanpuku Credit Union, which was established 1955, was dissolved in April 1997 with bad loans amounting to about 22 billion yen.