Nomura chief steps down over scandal

TOKYO - Agence France-Presse

Nomura Holdings chief executive Kenichi Watanabe (R) bows at the start of a news conference announcing his demotion next to his successor Koji Nagai (L). EPA photo

The head of Japan’s biggest securities firm resigned yesterday in the wake of an embarrassing insider trading scandal, part of a widening national probe into the widespread practice.

Nomura Holdings’ Chief Executive Kenichi Watanabe will step down as of July 31, while Takumi Shibata, Nomura’s chief operating officer, will also leave his post, the company said in a statement.

Watanabe vowed last month he would not resign after Nomura released the findings of a damning report that revealed some employees had been leaking material information to clients. But yesterday, he stepped aside to be replaced by Koji Nagai, president of Nomura Securities. “I wanted to see that measures for improvement to address the matters pointed out (by authorities) and other additional measures are put in place,” Watanabe told a press briefing in Tokyo. The news comes as Japanese authorities are carrying out a wide-ranging probe into insider trading which, although illegal in Japan, is widespread and carries only token fines. Separately yesterday, Nomura said net profit in its fiscal first quarter to June shrank 89.4 percent to 1.89 billion yen ($24.19 million) owing to lower retail and wholesale trading business.

Revenue was 12 percent higher year-on-year at 369.3 billion yen, it said. Watanabe and the firm’s other top executives decided drastic action was needed to regain clients’ trust, according to earlier press reports, including the leading Nikkei business daily. Scandal-hit Nomura has reportedly been dumped from several bond and share sales including the government’s planned sale of its stake in Japan Tobacco and once-bankrupt Japan Airlines’ expected share offering later this year. The firm report said Japan’s biggest brokerage was overrun with “serious systemic defects that would erode confidence in (Nomura) as a securities company.”