TOKYO: Japan Post Holdings Co. on Friday announced the resignation of three group company presidents after the group received administrative punishments for improper sales of "Kampo" insurance products.

Masatsugu Nagato, president and chief executive officer of Japan Post Holdings, will resign after the turn of the year. Former internal affairs minister Hiroya Masuda will succeed him, taking the helm of the huge group rocked by the sales scandal.

On Friday, the Financial Services Agency ordered Japan Post Insurance Co. and Japan Post Co., the mail delivery arm of the holding company, to suspend part of their operations for three months through March 2020. The agency also issued a business improvement order to the two units and their parent.

Meanwhile, the internal affairs ministry issued a business improvement order to Japan Post Holdings and Japan Post Co. The ministry's action also included a business suspension order meted out against the mail unit.

"It is a serious problem, and a drastic improvement is needed," internal affairs minister Sanae Takaichi told a press conference after a cabinet meeting.

Financial Services Minister Taro Aso told a press conference that the Japan Post group failed to share necessary information internally.

Along with Nagato, Japan Post Insurance President and CEO Mitsuhiko Uehira and Kunio Yokoyama, president and CEO of the mail unit, will resign.

The FSA issued a business suspension order to Japan Post Insurance and Japan Post Co. for the first time.

Subject to the FSA order are operations for sales of Kampo insurance products. The group's mail and savings operations will not be affected.

The agency hopes to make the two subsidiaries focus on work to confirm details of their sales irregularities and establish preventive measures. The agency also severely criticized the parent company for group governance flaws.

At Japan Post Insurance, Deputy President Tetsuya Senda will succeed Uehira, while Kazuhide Kinugawa, senior managing executive officer of Japan Post Holdings, will replace the mail arm's Yokoyama.

Also, Yasuo Suzuki, senior executive vice president of the holding company, will resign after being criticized for receiving information on the ministry's discussions on the administrative punishments from the then vice minister before the announcement. Suzuki himself used to be vice minister at the ministry.

Sales irregularities violating laws or internal rules are likely to have affected about 13,000 insurance contracts, according to a report by a committee set up by the Japan Post group to investigate the issue.

Jiji Press