Italy Seizes 1.8B Euro From Nomura

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Nomura Holdings, Inc. (ADR) (NYSE:NMR) (TYO:8604),  a Japanese investment bank, lost assets worth €1.8 billion when they were seized by Italian authorities.  The assets are linked to a probe related to allegations that the bank supported Banca Monte dei Paschi di Siena SpA (BIT:BMPS) in hiding massive losses from regulators and shareholders.

Italy Seizes 1.8B Euro From Nomura

Seizure of the assets will definitely have a huge adverse impact on the business of Nomura Holdings, Inc. (ADR) (NYSE:NMR) (TYO:8604). There has already been a case filed against the firm along with Deutsche Bank AG (NYSE:DB) (ETR:DBK) by the new management of Monte dei Paschi for conducting such transactions, which hammered the position of Monte dei Paschi and tarnished its image as a benefactor for the City of Siena.

Banca Monte dei Paschi di Siena SpA (BIT:BMPS) filed a lawsuit against Nomura Holdings, Inc. (ADR) (NYSE:NMR) (TYO:8604) in March 2009, which was related to the transaction known as Alexandria that was used to hide the loss from regulators, said the Italian bank. This transaction resulted into the loss of €273.5 million. Deutsche Bank AG (NYSE:DB) (ETR:DBK) was also sued by Monte dei Paschi regarding the transaction Santorini, conducted in December 2008. The transaction cost €305.2 million.

According to the reports, the transaction was unearthed when the newly appointed chief executive of Monte dei Paschi, Fabrizio Viola, came across an exchange of letters with Nomura kept in the safe.

As per the prosecuting Office of Sienna the assets, which were seized, were kept with the Italian unit of Nomura Holdings, Inc. (ADR) (NYSE:NMR) (TYO:8604) as collateral by Banca Monte dei Paschi di Siena SpA (BIT:BMPS) in return for a loan. The process of seizing the assets was conducted by Italian financial police in Siena, Rome, Milan and Bologna, as well as the southern Italian city of Catanzaro.

Apart from these assets, funds from the former executives of Monte dei Paschi were also seized. These three former executives were under investigation, as well.  Funds worth €2.3 million, or $3 million from Giuseppe Mussari, former chairman of the bank, were seized by the financial police. The other two executives are Antonio Vigni, the former director general, whose €9.9 million was seized and Gianluca Baldassarri, the former chief financial officer, who lost €2.2 million under seizure.

Monte dei Paschi incurred a loss of approximately €3.2 billion in 2012, which is actually a narrow down from the previous loss of €4.7 billion in 2011.

The Banca Monte dei Paschi di Siena SpA (BIT:BMPS) is a five century old bank. This is the oldest bank in the world and sits in third position in Italy. The new chairman of Monte dei Pasche is working towards overhauling the image of the bank along with its reputation. Under his reign there has been major restructuring including replacing of executives, shuttering the branches and trimming off thousands of jobs.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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