Nomura head bows out with public apology

The president of Nomura Securities resigned yesterday, a week after admitting that his company made illegal payments to the family of a gangster and amid rumours of similar misconduct at other Japanese brokerages.

Hideo Sakamaki announced his resignation to "take responsibility" for the scandal, although he has denied any personal involvement and will remain attached to Nomura as an "adviser".

"As the head of a company which is responsible for what happens in markets, I thought it important to resign from corporate management. I am truly sorry," he said, and then placed his hands on a table and bowed deeply.

Hiroshi Mitsuzuka, the Finance Minister, said yesterday that regulatory authorities would probably investigate other brokerage houses after growing rumours that Nomura's competitors may also have been involved in illegal relationships with professional blackmailers, called sokaiya in Japanese, who extort large sums by threatening to disrupt shareholders' meetings.

Reports in Japan yesterday suggested the sokaiya-related company which was illegally paid by Nomura also had accounts at Japan's other big three brokerages, Daiwa, Nikko and Yamaichi Securities. "It's hard to believe the authorities will ignore such reports," said Mr Mitsuzuka. "It's common sense for them to conduct an appropriate investigation."

Mr Sakamaki's post was taken over by Nomura's chairman, Masashi Suzuki, who promised to "rebuild the Nomura group and hand it to the next generation. By recreating healthy operating systems, Nomura will focus on recovering trust from all market investors and stockholders."

But things are likely to get worse for Nomura before they get better and over the past week the firm has attracted harsh wide-spread criticism.