Nomura ¥39 Billion Litigation Provision on Historic US Legacy Transaction Challenged by Hedge Fund


 

​KEY

POINTS

​March 30, 2022

  • Recent Nomura Holdings, Inc. (8604.T) Litigation Claim Surprise Provision Announcement: October 29, 2021 Financial Times Article (collectively “NHI”) “Nomura profits fall 95% after writedown on historic US transaction

  • Nomura Holdings, Inc. Form 6-K dated November 5, 2021 Consolidated Results of Operations Second Quarter, Year Ending March 31, 2022 (SEC File Number: 1-15270) stated: NHI “booked provisions of approximately Yen 39 billion (USD345 million) related to legacy transactions in the America’s from before the global financial crisis (2007-2008)

  • A prior Weston Press Release issued January 18, 2017 stated: “Noteholders Issue US$343,000,000 Final Notices of Principal Maturity Redemption Defaults and Issuer’s Early Redemption Default to Nomura International Plc, Nomura Bank International Plc and Nomura Holdings, Inc.


The Nomura Legacy Transaction Litigation Claim settlement provisions declared by Nomura Holdings, Inc. (“NHI”) on October 29, 2021 in their US SEC 6K for the September 30, 2021 (FYE Q-2 2022) Period cites “Legacy Transactions in the Americas from before 2007-2008”. Weston International Capital Limited (“WICL”) is an open-end privately held investment company specializing in distressed securities, litigation claims and special situations in the global emerging markets. “Weston firmly believes that we are the Plaintiffs that remain “unnamed” in this Nomura “Legacy Transactions in the America’s” settlement provision statement. Our analysts and legal counsel have interpreted the reference to the “Americas” as a reference to USD “Legacy Transactions” that Weston sued Nomura International Plc (“NIP”) and Nomura Bank International Plc (“NBI”) for in August 2016” said a Weston spokesman.


Over USD9.14 billion of NIP securities issuances were structured, underwritten, documented and illicitly layered, placed and integrated into the global financial system by Nomura directly through PT Bank J Trust Indonesia TBK (fka PT Bank Century TBK) and First Gulf Asia Holding Limited (dissolved 2011) from 2003 to 2019. All 127 of these securities, loan instruments, and original Nomura Share Purchase Agreements issuances defaulted at 0.00% from 2008 to 2022 in an amount exceeding USD9.14 billion. Weston’s lawsuits refer to over USD1.550 billion of WIARCO and FGFL issued preliminary and final Notices of Final Defaults and Cross Defaults against NIP/NBI and NHI on these securities, loan and share purchase issuances. These Final Default and Demand for Payment Notices were served on Clearstream and Euroclear, Deutsche Bank AG, London Branch and Citibank NA, London Branch as Paying Agents and NIP and NBI in August 2016, December 2018 and January 2022 by Weston as well as to global regulators in the US, UK, Mauritius and Singapore.


Weston International Asset Recovery Company Limited (“WIARCO”), a wholly owned subsidiary of WICL, issued legal proceedings in the Supreme Court of Mauritius Commercial Division in August 2016 against Nomura for USD1.067 billion citing long running securities fraud and alleging Nomura’s illicit acquisitions and non-payment of USD721,720,700. Nomura’s illicit acquisitions of 7,217,207 First Global Funds Limited PCC Participating Redeemable Preference Shares were documented in twenty-three (23) Share Purchase Agreement transactions from 2003 to 2008. Nomura’s default in payment for its acquisition of the 7,217,207 FGFL Preference Shares required NIP to pay USD100.00 per share in cash no later than December 31, 2008.


Weston claims that these FGFL Preference Share acquisitions by Nomura consisted of FGFL shares that were never legally and validly issued and never paid for in cash in the Aggregate Amount of USD721,720,700 (plus statutory interest) from 2003 to 2008 (the “Legacy Transactions”) as required under Mauritius law. The FGFL shares were declared null and void ab initio and declared the Proceeds of Crime under Mauritius Companies Act law by FGFL in 2016 and therefore do not qualify as Nomura Securities Issuance Reference Fund or Reference Portfolio securities for Principal Aggregate Redemption Maturity Amount purposes. These counterfeit FGFL Preference Shares purportedly served as underlying collateral for the issuance of USD1.54 billion of 16 NIP issued Primary Issuance Variable Redemption Certificates of Deposit (“VRCDs”), Variable Redemption Notes (“VRNs”) and Fiduciary Notes (“FNs”) totalling USD773.5 million, 16 NBI Secondary Issuance NBI Variable Rate Notes totalling USD770.5 million, 61 NIP Tertiary Euro-Commercial Paper Issuances totalling USD5.808 billion and 2 NBI Tertiary Certificates of Deposit Issuance totalling USD30 million. The total amount of 127 Nomura issued securities defaults now exceeds USD8.1 billion. A further estimated USD1.2 billion of NIP issuance defaults are pending incremental litigation claims.

A Weston spokesman stated “this Q-2 2022 Nomura Holdings Inc. general provision of USD345 million is surprisingly close to the USD343 million claims Weston issued in our January 18, 2017 Press Release and most probably refer to Weston as the “Legacy Transactions from before 2007-2008”. We asserted in November 2021 that Nomura was under-provisioning for our existing USD1.067 billion Litigation Claims by a significant multiple. Weston maintains that position today as now these claims are tied to derivative lawsuits against the Nomura Defendants, their advisors and co-conspirators. Weston remains perplexed as to how Nomura has wilfully neglected to disclose Weston’s USD1.067 billion Lawsuit Claims to the NMR TSE (8604.T) and NYSE shareholder base as well as to the U.S. SEC and the UK Financial Conduct Authority in their public U.S. SEC 21F and 6K filings for over 6 years. Weston documented in November 2021 in Supreme Court of Mauritius filings that Nomura was under-provisioning for our USD1.067 billion Lawsuit Claims by a significant multiple. We believe Nomura needs to immediately and conclusively address the billions of US Dollars of global Litigation Claims against them before Nomura’s Fiscal Year End March 31, 2022 and radically increase the NHI Litigation Claim Settlement loss provisions for the Fiscal Year End March 2022 annual audit and close out their two decade history of securities and underwriting regulatory fraud. We call on Nomura’s newly formed “Nomura Executive Board Risk Committee” led by NHI Group CEO Kentaro Okuda, NHI CFO/CAO Takumi Kitamura and NIP CAO/CTO Jonathan Lewis to issue a statement confirming Nomura’s intentions and publicly disclose the Weston Plaintiffs as the unnamed “Legacy Transaction Counterpart”.

The spokesman for Weston further stated: “We firmly believe the ¥39 billion (approximately USD343 million) provision Nomura Holdings Inc. took in its U.S. Securities and Exchange Commission form 6K (file number: 1-15270) issued on October 29, 2021 reflects Nomura’s assessment of a only small portion of their liability in our matter


About Weston International Asset Recovery Company Limited and First Global Funds Limited PCC


Weston International Asset Recovery Company Limited and First Global Funds Limited PCC are wholly owned subsidiaries of Weston International Capital Limited. Weston International Capital Limited is an open-end privately held investment company specializing in distressed securities, litigation claims, special situations and strategic activist acquisitions. The firm has USD4.5 billion of portfolio assets and litigation claims under management and is headquartered in the Republic of Mauritius.


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Press Release 2022-03-30
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