INDIVIDUAL SHAREHOLDER BRINGS DERIVATIVE ACTION AGAINST MIZUHO FINANCIAL GROUP FOLLOWING "ANTI-SOCIAL FORCES" LOANS SCANDAL

An individual shareholder has brought a derivative action against Mizuho Financial Group, Inc. ("MFG"), a holding company of Mizuho Bank, Ltd. ("Mizuho"), following the Japanese FSA's action against these companies on the basis of loans made to "anti-social forces".

On 28 March 2014, an individual shareholder of MFG launched a shareholder derivative action in the Tokyo District Court against 14 former and incumbent executives of MFG for failing to perform their duties by not taking appropriate measures to prevent transactions with anti-social forces. The shareholder in question is said to be an individual from Yokohama near Tokyo and is seeking JPY1.67 billion (USD$16 million) in damages. This is the first such shareholder derivative action brought against MFG executives in relation to the "anti-social forces" loans scandal. However, questions have been raised in relation to whether it will be possible for a shareholder of Mizuho's parent, MFG, to bring such a derivative claim in respect of actions taken by Mizuho.

JAPAN TRANSPORTATION CONSULTANTS INC. SUSPECTED OF PAYING BRIBES

A Tokyo-based railway consulting company, Japan Transportation Consultants Inc. ("JTC"), whose major shareholders include wholly owned subsidiaries of Japan Railways East and Japan Railways Tokai, is accused of having paid approximately JPY100 million in rebates in order to win orders to carry out projects financed by Japan's Official Development Assistance programme. It is alleged that JTC paid the rebates in relation to projects in Vietnam, Indonesia and Uzbekistan over a five-year period from 2008. If such payments were made to government officials, they may constitute a violation of the Japanese Unfair Competition Prevention Act.

Following the emergence of reports alleging the payment of rebates to Vietnamese government officials, on 25 March 2014, the Vietnamese Ministry of Transport requested that JTC specifically address these allegations in writing. The Japanese and Vietnamese governments are cooperating to resolve the matter.

JTC has also set up an independent panel in order to investigate the allegations that rebates may have been paid to foreign government officials, and has provided relevant information to the Tokyo District Public Prosecutors Office.