FSA Punishes Securities Firm Linked with Lawmaker Hosono

July 25, 2018

Tokyo- Japan's Financial Services Agency stripped JC Securities Co. of the registered status as a financial products trader on Tuesday, on the grounds that the politician-linked securities firm's management control system has not worked properly.

According to the agency, JC Securities increased its capital by 256.84 million yen in October last year by allotting new shares to its parent company without holding board and shareholders meetings as required by the corporate law.

Furthermore, the Tokyo-based company submitted to authorities the bogus minutes of a board meeting that said the board approved the capital increase through a legitimate process. It loaned most of the proceeds from the new share allotment without conducting screening on lending purposes and borrowers' repayment abilities.

The loans included 50 million yen extended to Goshi Hosono, former environment minister, during the campaign period for the House of Representatives election held in the same month, informed sources said.

The cancellation of the registration has made it impossible for JC Securities to sell investment trusts and other financial products. But the company, which has never sold such products, can continue providing advice on mergers and acquisitions, its mainstay business, without the registration.

In a statement, JC Securities apologized for being punished and vowed not to cause any trouble to customers. Its board members include former Lower House lawmakers. Jiji Press