Photo/IllutrationSuruga Bank’s new president, Michio Arikuni, apologizes for the improper loans extended to “share house” owners at a news conference in Numazu, Shizuoka Prefecture, on Sept. 7. (Tatsuro Sugiura)

NUMAZU, Shizuoka Prefecture--Suruga Bank Chairman Mitsuyoshi Okano resigned after an investigation report said he “bears the heaviest management responsibility” for a scandal involving improper lending as well as abuse and even death threats directed at employees.

The report by a third-party committee investigating the scandal said on Sept. 7 that many members of management failed to perform their duties of paying the necessary attention to the bank’s operations.

President Akihiro Yoneyama, 52, and three other executives also resigned. Michio Arikuni, 52, replaced Yoneyama as president.

Okano, 73, is a member of the founding family of the financial institution based in Numazu.

The report, which was submitted to the bank, said an executive officer at Suruga Bank played a key role in extending improper loans to would-be investors in share houses. The executive officer often berated employees at the screening division, which checks on the propriety of loans to be extended.

Because of the verbal abuse, the screening division could not function properly, the report said.

“(The impropriety) was conducted as an organization and lasted for a long period,” the report read.

Branch managers and many other employees who were under enormous pressure to meet excessive quotas were involved in the improper lending practice, the committee said.

According to the report, superiors at the bank verbally abused employees if their business performances did not improve.

One employee is quoted in the report as saying, “I was told to jump off a building if I couldn’t achieve my target.”

Another employee said: “I was forced to stand in front of my superior’s desk while he berated me. The superior also hit and kicked the desk. He ripped apart my request for approval and threw it at me.”

Another employee said, “An object was thrown at me. My PC was hit. I was told that (the superior) would kill all of my family members.”

In the scandal, real estate agents encouraged people to become owners of share houses, in which multiple tenants share common fixtures, such as bathrooms and kitchens.

The agents promised the investors monthly returns in the form of rent payments from tenants. Many people became owners by gaining loans mainly from Suruga Bank.

To obtain the loans, the real estate agents used improper methods, such as inflating the borrowers’ deposits or annual income to make them appear richer.

According to the report, many Suruga Bank employees cooperated with the improper practices. For example, they issued instructions to real estate agents on how to falsify the borrowers’ bank books.

Falsifications have been conducted in at least 795 cases since 2014. However, the report said it is impossible to determine the total number of cases and the total amount of loans extended through the improper means.

The outstanding balance of loans extended by the bank stands at 3.2 trillion yen (about $28.8 billion). Of that amount, 1.9 trillion yen was used for investments in real estate.

Many of the investors filed lawsuits after failing to gain the promised returns. Many of the share houses could not be filled with enough tenants.