Italy freezes Nomura assets in Monte Paschi probe

Fri Apr 26, 2013 8:38am EDT
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By Nathan Layne and Silvia Ognibene

TOKYO/SIENA (Reuters) - Nomura Holdings Inc (8604.T: Quote) said on Friday Italian prosecutors had frozen its assets in Italy in connection with a high-profile investigation over a derivatives contract with local lender Banca Monte Dei Paschi di Siena (BMPS.MI: Quote).

Nomura Chief Financial Officer Shigesuke Kashiwagi said his bank had been informed on April 23 that Nomura Bank International's (NBI) assets in Italy had been frozen.

Kashiwagi said Nomura believed the move was unwarranted and said the action would have no impact on the settlement of the Japanese bank's trades across Europe and the assets were small.

Prosecutors investigating risky derivatives trades that have endangered Monte Paschi's survival ordered on April 16 the seizure of around 1.8 billion euros of assets from Nomura in connection to the probe.

The trades include a structured deal known as 'Alexandria', done with Nomura, a similar trade called 'Santorini', with Deutsche Bank (DBKGn.DE: Quote) and a smaller deal called 'Nota Italia', done with JP Morgan (JPM.N: Quote).

The frozen assets include a "small amount of cash and receivables", Kashiwagi said at an earnings briefing.

"These assets will remain the property of NBI, but pursuant to the prosecutor's order, may not be withdrawn," the CFO said, adding the bank would attempt to talk with prosecutors to resolve the situation.

Assets of Nomura's Milan branch were not frozen as this account is used for funding day-to-day operations, he added.   Continued...

The entrance of Monte Dei Paschi bank headquarters is pictured in Siena January 24, 2013. REUTERS/Stefano Rellandini