The Tohoku Local Finance Bureau has filed criminal charges against Iwaki Shinkumi, a credit cooperative in Iwaki, Fukushima Prefecture, and its former executives for allegedly providing false explanations during an on-site inspection. The institution engaged in fraudulent loans totaling ¥27.9 billion over about 20 years starting in 2004 and supplied ¥1 billion to antisocial forces from 2004 to 2016.
Iwaki Shinkumi, a community-based credit cooperative serving small and midsize companies in Iwaki, Fukushima, has faced severe scrutiny for its governance failures. From 2004, it extended fraudulent loans amounting to ¥27.9 billion to major clients whose finances had deteriorated, including by opening fake accounts without account holders' consent.
Even more concerning, the institution allegedly provided a total of ¥1 billion to antisocial forces between 2004 and 2016. This misconduct persisted under a former chairman who led the cooperative for 20 years until his resignation in November 2024. The loans were partly used to fund payments to intermediaries aimed at halting street campaigns by a right-wing group against the chairman.
The Great East Japan Earthquake in 2011 worsened the cooperative's performance, leading to a ¥17.5 billion injection of public funds in 2012. Despite this support, an investigation by the Tohoku Local Finance Bureau, launched in May 2025, uncovered deep-rooted issues. Employees falsely claimed to have destroyed a computer holding loan data and concealed executives' involvement in irregularities.
The bureau filed criminal charges against the cooperative and individuals for violating the Act on Financial Businesses by Credit Cooperatives, citing false statements during inspections. Fukushima prefectural police must probe not only these deceptions but also the full extent of improper lending and antisocial connections. The Financial Services Agency should reflect on its oversight failures and bolster monitoring mechanisms to restore trust in such institutions. (178 words)
