U.S. News

Nikko Cordial Denies Report Executives to Resign


Japanese securities firm Nikko Cordial Friday denied a newspaper report that two of its top executives were likely to resign to take responsibility for an accounting scandal that could
possibly lead to the delisting of Japan's third-largest brokerage.

The Yomiuri newspaper reported on Friday that the company's chief executive, Junichi Arimura, and its chairman, Masashi Kaneko, could resign after regulators said the brokerage had improperly booked $156 million in profits. The paper cited several unidentified sources.

Nikko Cordial denied the report in a brief statement. "The report is not true," it said.

The company acknowledged the faulty accounting on Monday and cut its reported profit for the 2004/05 business year by a quarter. It said the accounting problem stemmed from an administrative error.

The brokerage, which is 4.8% owned by Citigroup, faces a $4 million fine and a review by the Tokyo Stock Exchange that could lead to its delisting.

Chief Executive Arimura and other executives will give up half their pay for six months and reimburse the company for the fine, Nikko Cordial said earlier this week.