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.
2 comments:
Indeed. Amazingly, this decision comes from the American Chamber of Commerce in Japan's 2005 Man of the Year! I'm sure Citi now rues their vote for the guy (assuming they voted for him). Meat of the press release follows:
Mr. Nishimuro's contribution to U.S.-Japan relations stretches back to his leadership at Toshiba and many years of residence in the U.S.
representing Toshiba, which began in 1965. Mr. Nishimuro pioneered
manufacturing initiatives in the U.S. which set the stage for continued innovative work between Toshiba and the public and private sectors in America.
As Chairman of The Japan-U.S. Business Council, Mr. Nishimuro has played a critical role in bringing together top executives of U.S. and Japanese companies to work toward a recommendation that calls for a comprehensive and strategic Economic Partnership Agreement that will further enhance the U.S.-Japan
economic integration.
His exemplary work as a leader has been praised by numerous organizations, such as the Japan Business Federation, the Japan-U.S. Business Council, the International Labour Organization, and the WTO. With Mr. Nishimuro's help, such organizations, including the ACCJ, have taken positive steps in both bringing to light and progressing toward the shared goals of the U.S. and Japan.
Of Nishimuro’s selection as the ACCJ’s 2005 Person of the Year, ACCJ President Charles D. Lake II said, “In addition to his professional accomplishments, Mr. Nishimuro is a true gentlemen; considerate and caring, and someone who has genuinely touched the hearts of those around him.
This sordid move really puts the Lincoln Newsweek piece in a worse light.
http://www.msnbc.msn.com/id/17081624/site/newsweek/
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