Mizuho considers replacing presidents over repeated system glitches

The Yomiuri Shimbun

November 19, 2021

Tatsufumi Sakai, president of Mizuho Financial Group Inc., is likely to step down to take responsibility for system glitches that occurred at the company eight times this year alone, affecting automated teller machines and causing other problems.

Koji Fujiwara, president of Mizuho Bank Ltd., is likely to be replaced as well.

The Financial Services Agency (FSA) will issue business improvement orders to Mizuho FG and Mizuho Bank as early as this month, while holding outside directors accountable for supervising executives.

In periods from February to March and from August to September this year, Mizuho suffered a total of eight system failures with its over-the-counter and ATM transactions and remittances in foreign currencies.

“We’ve created so many problems that we need to replace the top,” a Mizuho executive said.

The group’s nominating committee will discuss the appointment of a new president and the timing of the replacements of Sakai, who assumed his post in April 2018, and Fujiwara, who has served in his post since April 2017. Mizuho is expected to take thorough measures to prevent a recurrence of similar failures for the time being and to replace the presidents by around the spring of 2022 after coping with the series of system failures.

The FSA has taken seriously the top executives’ lack of awareness of the system failures, and outside directors’ failure to check matters thoroughly instead of merely accepting explanations given by the executives.

It was also revealed that Mizuho sent money overseas without following procedures stipulated in the Foreign Exchange and Foreign Trade Law at the time of a system failure in September. It may have executed dozens of money transfers without sufficient checking, although it was required to check for the possibility of money laundering in those transactions.

Mizuho later did confirm that there were no transfers related to money laundering.

“It’s only the benefit of hindsight,” a senior government official said. “The bank must establish a sufficient checking system.