15 Top Executives Resign In 2nd Nomura Scandal

Japanese Brokerage Had Been Dealing With Gangsters

April 23, 1997|By BLOOMBERG NEWS

TOKYO -- Nomura Securities Co.'s top 15 executives resigned yesterday in an unprecedented bid by the Japanese brokerage to restore an image tarnished by disclosures that it was illegally dealing with gangsters.

The resignations, which included the head of Nomura's European operations and 14 Tokyo-based executives, come six weeks after Nomura said two executives had passed $560,000 through an illegal account to a sokaiya, a racketeer who blackmails companies. It was the second mob-related scandal involving Nomura in six years.

The purge comes as Japan's largest brokerage looks to rebuild relations with international and domestic customers, many of whom have stopped dealing with Nomura in the past month.

"Investors sense the worst is over," said Masayasu Sugawara, head of the strategy section at Marusan Securities Co. in Tokyo. Nomura shares rose 70 yen, or 5.4 percent, to 1,370 yesterday.

Nomura named as president Junichi Ujiie, a 51-year-old educated in the United States, to replace Hideo Sakamaki, 61, who stepped down last month. Ujiie told a Tokyo news conference that he'll focus on "clear rules and clear management. This problem shows Nomura was lacking clear and open discussion at certain levels." He will also oversee the strengthening of the company's internal oversight, he said.

Japanese company presidents often resign to take responsibility for scandals, even if they're not directly linked to a crime. Yet it's extremely rare for all the voting members of a company's board to resign.

The mass resignation shows how serious this scandal is to Nomura and to the authorities, whom investors criticize for lax regulation of the financial markets.

Chairman Masashi Suzuki, who briefly held the president's post after Sakamaki resigned, stepped down as a voting member of the board yesterday but will remain chairman at Ujiie's request, he said. All nine remaining executives with votes on the board of directors were asked to resign, Suzuki said. An additional five executives who don't have votes on the board also resigned.

"This is the biggest crisis we've had since Nomura was established" more than 70 years ago, he said. "We want to gain trust as soon as possible. We had no choice other than leaving the management to a younger generation."

Hitoshi Tonomura, who heads the company's European operation Nomura International PLC, is one of the 15 to step down. However, no resignations are expected at Nomura Securities International Inc. in the United States, said the unit's chief executive, Michael Berman.

Pub Date: 4/23/97

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.