More problems with Citigroup, this time with its Japanese venture partner Nikko Securities. It seems that the firm’s top managers were accused of accounting fraud. Oops.
An outside investigation commissioned by Nikko Cordial concluded that Junichi Arimura, its former president, who resigned last month over the scandal, must bear “grave managerial responsibility” for the accounting fraud, which padded the broker’s net profits by 33 per cent in the year to March 2005.
Nikko Cordial has persistently denied involvement by top management in the fraud. The scandal had already affected business at Nikko Citigroup, the investment bank which is 49 per cent owned by Citigroup and 51 per cent by Nikko Cordial, Mr Arimura said last month.
Nikko’s problems are the latest setback for Citigroup in Japan. Regulators forced Citigroup to close its private bank in Japan in 2004 following a series of regulatory breaches. It recently announced a $415m charge to cover massive restructuring of its consumer finance business after the government capped lending rates.
Nikko’s top bosses named in scandal – Financial Times
Tags: Citigroup
