Sumitomo Bank Chairman Resigns

October 08, 1990

The chairman of Sumitomo Bank, among the world's three largest banks, resigned yesterday over a scandal involving illegal loans used to manipulate the stock of an aerial survey company.

Ichiro Isoda, 77, who led Sumitomo's growth to become Japan's most profitable bank, announced his resignation following the arrest Friday of Akinori Yamashita, a former branch manager.

Mr. Yamashita was arrested on suspicion of having arranged about $170 million in illegal loans to two groups allegedly involved in stock manipulation.

News reports said Mr. Yamashita arranged for bank depositors to provide a loan of $85 million at higher-than-normal interest rates to Koshin, a speculators' group, and a separate loan of $86 million to another group, Tosho Shoji. The loan to Koshin was used to buy up stocks of Kokusai Kogyo, a Tokyo-based aerial survey company, the news report said.

The nationally circulated newspaper Asahi Shimbun quoted investigators as saying Mr. Yamashita received more than $748,000 and inside stock information for arranging the loans.

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