Daiwa to close trust arm in New York

RICHARD LLOYD-PARRY

Tokyo

The embattled Daiwa Bank has decided to liquidate one of its New York subsidiaries, as the Japanese government struggles to distance itself from the scandal of the bank's huge losses on the New York bond market.

According to sources quoted by the Kyodo news agency yesterday, the bank's US trust arm, Daiwa Bank Trust, will be closed down and its business transferred to other Daiwa branches. Between 1984 and 1987 two employees of the company incurred losses of $97m, which were finally written off in September last year. They came to light only this month during investigations into a separate bond scandal at the parent bank's New York branch, where a senior dealer, Toshihide Iguchi, racked up losses of $1.1bn during 11 years of illegal trades.

The US authorities are investigating both cases on the suspicion that Daiwa may have deliberately concealed the losses from banking regulators.

Last night the director-general of the Japanese Ministry of Finance's International Finance Bureau, Eisuke Sakakibara, conceded for the first time that senior Daiwa personnel may have acted improperly in keeping the losses hidden for so long. "I was deeply disturbed by the way the bank reported the Daiwa Trust business to us," he said, "because it does suggest some involvement on the part of the management."

The affair is embarrassing to the Ministry of Finance, which is struggling to rebut suggestions that it colluded with Daiwa in concealing Mr Iguchi's fraud. The former Daiwa chairman, Akira Fujita, visited the ministry's banking bureau on 8 August and said that the bank was investigating the losses.

In the days following this meeting, Daiwa actively increased its funding operations, in an apparent attempt to cover its losses. But the first that the US Federal Reserve knew of the problem was on 18 September.

News
people
Sport
Newcastle players celebrate, Mario Balotelli scores, Alan Pardew and Brendan Rodgers
footballNewcastle vs Liverpool , Arsenal vs Burnley, Chelsea vs QPR and Everton vs Swansea
News
i100Amazing Amazon review bomb
Arts and Entertainment
The Spice Girls' feminism consisted of shouting 'girl power' and doing peace signs in latex catsuits
musicWhat is it? You know what you want it to be...
PROMOTED VIDEO
News
people
Life and Style
food + drinkFrom Mediterranean Tomato Tart to Raw Caramel Peanut Pie
News
Moss and Grimshaw arrive at the party
peopleKate Moss, Claudia Schiffer and Nick Grimshaw at Jonathan Ross's Halloween party
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Armstrong, left, and Bain's writing credits include Peep Show, Fresh Meat, and The Old Guys
TVThe pair have presented their view of 21st-century foibles in shows such as Peep Show and Fresh Meat
News
i100
Extras
Boys to men: there’s nothing wrong with traditional ‘manly’ things, until masculinity is used to exclude people
indybest13 best grooming essentials
Travel
travelPurrrfect jet comes to Europe
Arts and Entertainment
Benedict Cumberbatch attends the London premiere of his new film The Imitation Game
people He's not as smart as his characters
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

The benefits of Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Day In a Page

Bryan Adams' heartstopping images of wounded British soldiers to go on show at Somerset House

Bryan Adams' images of wounded soldiers

Taken over the course of four years, Adams' portraits are an astonishing document of the aftermath of war
The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities