Finance minister warns Nomura of 'severe measures'

Nomura, the world's largest stockbroking house, was yesterday warned by Hiroshi Mitsuzuka, Japan's finance minister, that he would "take severe measures" against the company if investigations into suspected unauthorised trading were confirmed.

The warning came a day after Nomura said it suspected that two of its directors in Japan had paid millions of yen of illegal trading profits to a gangster, and amid strong rumours that Hideo Sakamaki, president of Nomura, would resign soon over the affair.

"In order to prevent a similar case, we must take strict measures," said Mr Mitsuzuka. The company could have its operations suspended for up to six months, according to an official at the finance ministry's securities bureau. He added that Nomura could also be fined if the trades breached criminal codes.

Nomura was punished by the Finance Ministry back in 1991 after it discovered that the company had compensated large clients for losses on investments to the tune of Y128bn (pounds 623m) at the expense of foreign clients. The company was forced to suspend stock trading at 87 branches for four weeks.

News of the latest scandal led Prime Minister Ryutaro Hashimoto, who is pushing through plans to deregulate Japan's financial markets, to ask yesterday: "Why do these things keep happening?" However, he failed to mention that he resigned as Finance Minister in 1991 after the ministry had consistently failed to prevent financial scandals.

Speculation was rife in Tokyo yesterday Mr Sakamaki will step down to take responsibility for the scandal. He would be the second Nomura president to quit in the space of seven years: his predecessor resigned after a similar incident in 1990.

A spokesman for Nomura said yesterday that he knew nothing about Mr Sakamaki's intentions, and said he could not make any further comment about the president's position or about the exact amount of money that is alleged to have been siphoned out of Nomura by the two directors.

Fallout from the scandal continued to undermine Nomura's share price on an otherwise generally good day of trading on Japan's stock market. Nomura's shares fell 3 per cent to Y1,530 in Tokyo, in contrast to the overall gains of almost 1 per registered by the Nikkei 225 index.

According to press reports in Japan, the two directors at Nomura illegally dealt in stocks from the company's own account and transferred the profits to a property company. The unnamed company had close family links with a sokaiya - a racketeer who extorts money from companies.

"We are profoundly sorry for engaging in transactions which should not have taken place," said Atsushi Saito, a vice president of Nomura. According to one report, five illegal "discretionary trades" were carried out by the two directors since 1993.

Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
ebooksAn unforgettable anthology of contemporary reportage
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments