OSAKA -- Two former executives of the now-defunct Fukutoku Bank, who allegedly extended illicit loans to cover up the true amount of the bank's nonperforming loans, said Monday in their first court hearing that the loans were meant to help resuscitate the ailing bank.
Former Fukutoku President Koji Oike and former Managing Director Mutsuo Higashi claimed in the Osaka District Court that they are innocent and that what they did was not for their own benefit.
The two have been charged with aggravated breach of trust.
According to prosecutors, the two executives submitted false figures of planned loan repayments to the Finance Ministry when the ministry inspected the bank in spring 1998.
To avoid a situation where liabilities exceeded assets, the bank, on the initiative of the two executives, extended new loans that amounted to 70 billion yen before the merger, they said.
Previous statements were apparently falsified to hide the bank's massive nonperforming loans before its scheduled merger with the Bank of Naniwa in October 1998 to create Namihaya Bank, they said.