TOKYO -- Japan Post Holdings, a government-controlled postal and financial services giant, will announce the resignations of three top executives over a sprawling fraud scandal affecting tens of thousands of customers, most of them elderly.
President Masatsugu Nagato, previously an official at Mizuho Bank and Citibank in Japan, will step down. The company plans to tap Hiroya Masuda, a former minister for internal affairs and communications, as his successor.
Japan Post Insurance President Mitsuhiko Uehira and Japan Post Co. President Kunio Yokoyama will also step down. The resignations will be formally announced at a news conference Friday, with a nominating committee slated to meet that day to discuss Masuda's possible appointment.
Masuda serves as an adviser at the Nomura Research Institute and sits on panels at the Ministry of Finance and the Financial Services Agency. Though he has no corporate management experience, the former Iwate governor has a proven track record in the public sector. The government, which owns 57% of Japan Post Holdings, has pushed for his appointment.
The resignations come after an internal probe found wrongdoing by sales representatives trying to meet aggressive targets. Between fiscal 2014 and fiscal 2018, as many as 183,000 transactions were made in which elderly customers were talked into policies that unnecessarily cost them extra money. Some customers were made to change policies repeatedly for no reason or pay repeatedly for the same service.
There have been 12,836 transactions that may have violated the law or internal rules. Japan Post now faces damages claims from 45,462 customers.
The Financial Services Agency is expected to ban Japan Post and Japan Post Insurance from selling insurance products for three months. The two units will also be ordered to devise measures to keep similar frauds from happening again.