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Nomura chief resigns following insider-trading scandal | Nomura chief resigns following insider-trading scandal |
(about 1 hour later) | |
The chief executive of Japan's Nomura Holdings has resigned following a damaging insider-trading scandal at the investment bank. | |
Kenichi Watanabe will step down on 31 July, and chief operating officer Takumi Shibata will also leave his post. | |
It is alleged that staff leaked information on share offerings to customers before it was made public. | It is alleged that staff leaked information on share offerings to customers before it was made public. |
Nomura shares rose more than 5% in Tokyo on the news. | Nomura shares rose more than 5% in Tokyo on the news. |
The resignations came the same day as the bank posted a 89.4% drop in net profit in the fiscal first quarter to 1.89bn yen ($24.19m; £15.60m) from a year earlier. In Japan the fiscal year begins in April. | The resignations came the same day as the bank posted a 89.4% drop in net profit in the fiscal first quarter to 1.89bn yen ($24.19m; £15.60m) from a year earlier. In Japan the fiscal year begins in April. |
Revenue was up 12% year-on-year at 369.3bn yen. | Revenue was up 12% year-on-year at 369.3bn yen. |
'Bold choices' | 'Bold choices' |
Koji Nagai, president of Nomura Securities, the domestic brokerage, will replace Mr Watanabe as the new head of the group. | Koji Nagai, president of Nomura Securities, the domestic brokerage, will replace Mr Watanabe as the new head of the group. |
"We will make bold choices of what we will focus on," said Mr Nagai at a press conference, adding he would chart a "new global strategy". | "We will make bold choices of what we will focus on," said Mr Nagai at a press conference, adding he would chart a "new global strategy". |
"We will not simply stick to how we did things in the past," he said. | "We will not simply stick to how we did things in the past," he said. |
Japan's largest investment bank by revenues also appointed Atsushi Yoshikawa, head of US operations, as its new chief operating officer. | Japan's largest investment bank by revenues also appointed Atsushi Yoshikawa, head of US operations, as its new chief operating officer. |
Last month, Nomura slashed the salaries of Mr Watanabe and Mr Shibata after an internal probe into the leaks. | Last month, Nomura slashed the salaries of Mr Watanabe and Mr Shibata after an internal probe into the leaks. |
Mr Watanabe was docked half of his six-month salary, while Mr Shibata was hit for half of his five-month salary. | Mr Watanabe was docked half of his six-month salary, while Mr Shibata was hit for half of his five-month salary. |
The company has also admitted that some of its staff leaked sensitive information on planned share offerings by energy firm Inpex, Mizuho Financial Group and Tokyo Electric Power in 2010. | The company has also admitted that some of its staff leaked sensitive information on planned share offerings by energy firm Inpex, Mizuho Financial Group and Tokyo Electric Power in 2010. |
But on Thursday, Nomura said it was "highly possible" that there were more cases of insider trading than the three already identified and reported to the Financial Services Agency. | But on Thursday, Nomura said it was "highly possible" that there were more cases of insider trading than the three already identified and reported to the Financial Services Agency. |
'Last straw' | 'Last straw' |
"When you look at their history, the number of scandals, this was the last straw," said Jim Sinegal, an analyst with research firm Morningstar. | "When you look at their history, the number of scandals, this was the last straw," said Jim Sinegal, an analyst with research firm Morningstar. |
Mr Watanabe and Mr Shibata led Nomura's global push, taking over the non-US operations of Lehman Brothers in 2008, in what was described as a "once-in-a-generation opportunity." | Mr Watanabe and Mr Shibata led Nomura's global push, taking over the non-US operations of Lehman Brothers in 2008, in what was described as a "once-in-a-generation opportunity." |
However, the group has struggled since with a number of challenges, including cultural tensions over its business practices. | However, the group has struggled since with a number of challenges, including cultural tensions over its business practices. |
Earlier this year, Nomura ousted Jesse Bhattal, head of the global wholesale division, following disagreements over the direction of its overseas business. | Earlier this year, Nomura ousted Jesse Bhattal, head of the global wholesale division, following disagreements over the direction of its overseas business. |