Dai-Ichi Kangyo Bank lost $37M — unauthorized FX bets went undetected for years

Dai-Ichi Kangyo Bank (DKB) was Japan's largest commercial bank, formed by the 1971 merger of Dai-Ichi Bank and Nippon Kangyo Bank. It was the flagship bank of the DKB Group keiretsu.

In September 1982, DKB announced that its Singapore branch had lost approximately $37 million (¥9.7 billion) through unauthorized foreign exchange operations carried out over the preceding years. Chief currency trader Haruo Kanda had executed speculative forex positions without the approval of the Tokyo head office.

The loss was one of the earliest major foreign exchange scandals involving a Japanese bank abroad. DKB stated the loss would be treated as an extraordinary item and covered by profits from securities sales. The bank assured the public that the loss would not impede its international operations.

Kanda was dismissed and the Singapore branch manager was reprimanded. The scandal prompted Japanese banks to tighten oversight of their overseas branches, particularly in foreign exchange trading.