(by Roy Deng)

Japan No.4 bank may face charges from the Financial Services Agency, Japanese banking regulator, as the bank admitted it used to confuse regulators during the investigation.

UFJ is accused of destroying, forging and hiding documents as the bank is said to try all the possible ways to hide true information about its real state from regulators and investors amid the controversy between MTFG, the country’s third largest bank, and SMFG, the number two lender, in terms of takeover bid and creating the strongest bank in Japan.

UK’s Financial Services Authority opened a probe against the bank after it announced losses for the year ended March.

MTFG agreed to merge with UFJ and injected Y700 billion ($6.3 billion) into the bank to keep it solvent, but it has yet to announce a merger ratio. SMFG has offered a one-for-one share exchange that is subject to due diligence.

“This puts UFJ in an even worse bargaining position in terms of getting a decent deal and will put MTFG even more in the driving seat,” said Brett Hemsley, director of Fitch, the credit rating company.

Now UFJ tries to avoid the pressure from its shareholders and close the charges.