Executives of Tokyo Shogin, a credit union that mainly serves Korean residents in Japan, shredded a considerable number of documents shortly before the association's collapse Dec. 16, sources close to the case said Wednesday.
The executives are then believed to have incinerated the shredded papers at the bank's head office in Shinjuku Ward, Tokyo. They reportedly feared the consequences of an investigation by receivers into the reasons behind the credit union's collapse, the sources said.
The papers detailed, among other matters, window-dressing of bad loans, according to the sources.
Investigators at the Tokyo District Public Prosecutor's Office are also aware of this alleged attempt to destroy documents that may have been used as evidence and are questioning credit union officials, the sources said.
On Monday, prosecutors arrested the former head of Tokyo Shogin, 52-year-old Kim Song Jung, for allegedly embezzling around 86 million yen from the association.
Prosecutors are also investigating whether Tokyo Shogin was involved in extending loans to risky corporate clients. As part of the deal, these clients would then allegedly conceal these loans from the authorities, investigative sources said.
Tokyo Shogin was the second-largest pro-Seoul credit union for Koreans in Japan after Osaka's Kansai Kogin, which went under along with Tokyo Shogin in December.