TOKYO -- Major Japanese trust banks intend to sue Toshiba, claiming asset erosion caused by the company's accounting scandal and demanding compensation on behalf of investors such as pension funds.
As early as March, four trust banks -- Mitsubishi UFJ Trust and Banking, the Master Trust Bank of Japan and units under Sumitomo Mitsui Trust Holdings and Mizuho Financial Group -- will bring the matter to court, seeking a combined few billion yen (1 billion yen equals $8.8 million) for Toshiba's share price decline following the book-padding issue that surfaced in April 2015.
The planned lawsuit is perceived as unusual, given that Toshiba is a major customer for financial institutions and the accounting improprieties have not developed into a criminal case.
But the banks likely decided they could build a case based on Toshiba's admission of making false financial statements. The banks also face growing pressure to put their customers first. Japan's Financial Services Agency released a policy in October that pushes financial institutions to constantly seek the best ways to provide goods and services in the interest of customers.
Life insurers confront similar circumstances, and they will be watched for a response.