Tokyo Officers Raid Major Bank

TOKYO —  Prosecutors raided the Tokyo offices of Dai-Ichi Kangyo Bank on Tuesday to investigate the major bank’s possible loans to a corporate racketeer as the Nomura Securities Co. scandal broadened, Japanese media reports said.

The raid by more than 100 officers helped drive down Japanese stocks in early trading, led by banks, amid concern that the practices were not to limited Dai-Ichi, traders said.

“There’s always the possibility that other banks have been involved in this as well,” said Peter Lindsey, a Japanese-equity dealer at Schroders Japan Ltd.

Tokyo prosecutors raided the head office of Dai-Ichi to look for documents related to loans the bank made to the same corporate racketeer that Nomura paid off, NHK television reported.

The loans made by Dai-Ichi and an affiliate to the alleged racketeer, Ryuichi Koike, since the 1980s were used to buy stocks, including those in Nomura and three other major brokerages, the reports said.

Dai-Ichi’s main office and another office were searched, as were homes of executives, NHK said.

Koike, 54, and his brother Yoshinori, 52, were arrested Thursday on suspicion of receiving about $433,000 in illegal profits from Nomura in 1995 in exchange for allowing Nomura’s shareholders meeting to proceed smoothly.

Racketeers known as sokaiya extort money from companies by threatening to disrupt shareholders meetings.

Last week, Tokyo prosecutors also arrested three Nomura executives suspected of funneling money to Ryuichi Koike as trading-loss compensation.