Can TSE still secure investors' trust?
The Yomiuri Shimbun
The Tokyo Stock Exchange decided Monday to keep Nikko Cordial Corp. listed on the Tokyo bourse. However, it is a questionable decision. Could this not shake investors' trust in the fairness of market operations?
The securities company included inflated profits in its financial statements for the business year ended in March 2005 and thereafter by manipulating financial statements of a special-purpose company under the Nikko group and through other means.
One of the TSE's criteria for removing listed companies from the bourse is if the "effects of false reports on financial statements and other documents are serious."
The TSE concluded that Nikko Cordial's wrongdoing did not justify delisting, saying, "We could not obtain solid evidence that the false accounting was carried out by the company systematically," adding that the amount of inflated earnings was relatively small.
Oh, that and the little business detail that the reversal in the decision to delist will force Citibank to raise its offer, oh, a little bit (as of this morning, 26% more), earning current stockholders of the disgraced brokerage a windfall profit they do not deserve.
Under Nishimuro, an exceedingly tall, gracious and dignified individual, the Tokyo Stock Exchange has reeled from disaster to embarrassment to disaster again. I have until now defended him as having been the inheritor of a decrepit organization incapable of handling modern finance.
With this capricious decision, however, Nishimuro has demonstrated that the TSE is not an exchange, it is a protection racket. If I were an outsider, I would go elsewhere.