USD9 Billion of Nomura Structured Notes Default at Zero-Ad Hoc Bondholders Group Declares Fraud


​KEY

POINTS

April 21, 2022

  • Nomura International Plc (“NIP”) and Nomura Bank International (“NBI”), collectively (“Nomura”) issued USD9.15 billion of complex 3-tiered equity-linked securities from 2003 to 2008 that were underwritten and structured for the exclusive use of PT Bank Century TBK Indonesia, the most famous bank fraud in Indonesian history. These “Nomura / Bank Century securities” were bespokely designed to appear to be implied Nomura quasi-guaranteed instruments, but in fact, were securitizations linked to worthless Mauritian Fund Preference Shares backed by Indonesian bankrupt companies’ shares and debt securities from inception in 2003.

  • Weston International Capital Limited (“Weston”), a Mauritius based litigation claims fund, has sued Nomura for fraud and money laundering claiming damages in excess of USD1.1 billion. A Weston-led Ad Hoc Bondholders Committee owns and controls over USD800 million of these Nomura / Bank Century fraudulent securities. Recent Weston demands to Nomura start with an order to rescind USD9.15 billion of the Nomura / Bank Century securities issuances as Weston seeks to restore them to their pre-maturity default status in Clearstream and Euroclear in order to restructure each bond issuance.

  • Weston has called on Nomura Holding, Inc. (8604.T) (“NHI”) CEO Kentaro Okuda to order an immediate rescission of the 127 securities, notes and Mauritian share “repackaged” securities issued by Nomura and delivered exclusively to PT Bank Century TBK Indonesia, now known as PT Bank J Trust TBK from 2003 to 2008. “CEO Okuda has known of Nomura’s USD 9.15 billion global Ponzi scheme for over 10 years and has failed to date to self-report this in any US SEC, UK FCA and Japan FSA regulatory filings”, said a Weston spokesman.

  • Nomura systematically canceled all 127 of these defaulted securities and loans with a par value of USD9.15 billion from 2008 to 2019 without the permission of Weston Noteholders after defaulting on 100% of the Nomura / Bank Century securities issuances at 0.00% of par value. Nomura has ignored over USD1.55 billion of Final Default Notices served upon them by the Weston Bondholders since 2015. Weston claims that this is unprecedented in the annals of global financial bond markets and deleterious to Nomura shareholders and creditors.

Weston portfolio companies issued legal proceedings in the Supreme Court of Mauritius in 2016 against Nomura for USD1.06 billion citing Nomura’s legacy transaction misconduct and rampant securities mis-selling fraud. The 6 year old lawsuit alleges that senior executives of NIP and NBI in London led by former NIP EMEA CEO Sadeq Sayeed, with the full knowledge of Nomura Holdings, Inc. Board of Directors currently led by NHI CEO Kentaro Okuda, undertook a 19-year USD9.15 billion securities issuance and money laundering fraud (2003-2022) in partnership with the most corrupt bank in the history of Indonesia formerly known as PT Bank Century TBK and now operating under the J Trust Co Ltd (8508.T) banner led by CEO Nobuyoshi Fujisawa. The Indonesia Deposit Insurance Corporation (“IDIC”), previously run by Indonesian Ministry of State Owned Enterprises Deputy Minister Kartika Wirjoatmodjo, has led the Indonesian government's kleptocratic Bank Century fraud coverup since 2008. “The IDIC and Indonesian Ministry of Law and Human Rights, led by Minister Yasonna Laoly, are widely believed to have incurred legal expenses in excess of USD150 million concealing 20 years of Bank Century and Bank Indonesia audit and money laundering fraud while litigating over USD6 billion of Bank Century theft, embezzlement and global money laundering legal claims since 2003”, said a Weston spokesman.


From 2003 to 2008 Nomura underwrote and delivered to Bank Century over USD773.5 million of complex, fraudulent equity-linked securities supported by multiple tiers of secondary and tertiary NBI and NIP issued securities all secured from inception by First Global Funds Limited PCC (“FGFL”) Mauritian preference shares backed by notes and shares of over 50 bankrupt and defunct Indonesian and BVI shell companies. The fraudulently designed Nomura publicly listed securities issuances had the effect of convincing Bank Indonesia regulators and over 20 global bank securitized lenders to Bank Century that these securities were worth at least 100% of par value. However, every single one of the 200 Nomura issued and FGFL acquired securities were worthless from inception and defaulted at a perfect 0.00% of Par Value from 2008 to 2019 giving Nomura the unique global distinction of defaulting on all USD9.15 billion of Nomura / Bank Century securities issuances, a feat unmatched even in the U.S. sub-prime Residential Mortgage Backed Securities Global Financial Crisis of 2008.


Nomura’s former CEO in London, Sadeq Sayeed, along with Nomura internal and external legal counsel, documented and approved these rogue transactions before resigning from Nomura in 2010 with a golden parachute exit bonus reported to be at £22 million. Sayeed left Nomura with over USD8 billion of losses on NIP’s disastrous acquisition of Lehman Brothers and over USD8 billion of legacy losses, lawsuits and litigation claims tied to sub-prime RMBS mis-selling sanctions, fraud exposure losses to accused swindler Bernie Madoff (USD358.9 million), speculative losses on the Icelandic banking system implosion (USD425 million) and Nomura derivatives fraud in Italy (USD493 million), specifically the audit fraud Nomura allegedly enabled at Banca Monte dei Paschi di Sienna (BPMS. MI) in Italy. Nomura’s USD9.15 billion securities fraud at Bank Century enabled the Bank’s controlling shareholders and Indonesian government kleptocrats directed by former Bank Indonesia Governor and ROI Vice President Boediono, to steal and launder over USD3.0 billion from global banks in Mauritius, Amsterdam, Singapore, Dubai, Zurich, Cyprus, London and New York, amongst other jurisdictions. Former Nomura CEO Sayeed has since been indicted, convicted and sentenced to 4.8 years in jail in the Milan Courts (pending appeal) in 2019 for aiding and abetting over €2 billion of audit fraud at Banca Monte dei Paschi from 2009 to 2015. He remains free on appeal and is expected to be summoned to Mauritius to testify in the upcoming Weston v. Nomura fraud and money laundering trial.


Weston is making a new request to Nomura’s CEO Kentaro Okuda to self-report the USD9.15 billion Nomura / Bank Century securities and money laundering fraud to global regulators, “It is time for Nomura Tokyo and CEO Okuda to finally come clean on Nomura’s past global securities fraud misconduct. USD9.15 billion of Nomura’s fraudulent securities issuances to Bank Century has enabled over USD6.0 billion of audit, embezzlement and global money laundering fraud by the most corrupt bank ever created in South East Asia. Nomura single-handedly enabled these frauds and without Nomura’s 127 fraudulent securities issuances, the taxpayers of Indonesia would never have been defrauded of such enormous sums. Unfortunately, former and current Nomura senior board-level executives have condoned, aided and abetted this fraud for unjust enrichment and have now spent 12 years illicitly concealing it”, the Weston spokesman stated.


Nomura’s History of Indonesian Misconduct

From early 2003 to 2008, Nomura was repeatedly called on by convicted fraudster Robert Tantular to create complex par value Mauritian share linked securities to support fraudulent Bank Indonesia Capital Adequacy Ratio (“CAR”) regulatory capital filings of three bankrupt banks in Indonesia, namely Bank CIC, Bank Pikko and Bank Danpac, all controlled by Robert Tantular, a notorious Chinese Indonesian banker in Jakarta. Tantular’s three banks were attempting to execute a planned merger in 2003 and 2004 and desperately needed assets that would qualify as regulatory capital in order for Bank Indonesia, the country’s Central Bank, to approve the merger. Tantular used fronting entities to approach Nomura in London in early 2003 to assist him in perpetrating a massive regulatory, embezzlement and money laundering fraud. Nomura, through two of its London based Senior Managing Directors and legal team, was highly aware of Tantular’s previous frauds and his ban from the Indonesian banking industry for life as well as Bank CIC’s impending bankruptcy, yet worked with Tantular on a racketeering scheme to create a series of overly complex 3-tiered bond repackagings using fraudulently issued Mauritian preference shares and knowingly joined Tantular’s USD3 billion global embezzlement and money laundering feast.

From 2008 to 2019, NIP ordered the cancellation of USD9.15 billion of ISIN and Luxembourg Stock Exchange listed public and private securities in Clearstream and Euroclear after 100% of the 127 issuances defaulted at a perfect 0.00% of par value without the knowledge or permission of the Weston Ad Hoc Bondholders Committee holding USD800 million of these defaulted securities. A Weston spokesman said, “Nomura has committed over USD9.15 billion in total acts of securities fraud and concealment of cash and securities money laundering for over 19 years. It is time for Nomura CEO Okuda to self-report these serious infractions to the Mauritius Financial Services Commission, the US SEC, the US Department of Justice, the US Treasury Financial Action Task Force, the UK Financial Conduct Authority and the UK National Crime Agency and accept the appropriate penalties to absolve Nomura from its Legacy Transactions misconduct.”.


Weston Proposals to Nomura

Over the life of the USD12 billion Nomura / Bank Century Global Ponzi Scheme, NIP/NBI and NHI underwrote, issued, guaranteed, layered, and placed USD9.15 billion of securities and loans into Bank Century and the global banking system. Nomura then proceeded to cancel all 127 issuances for USD9.15 billion, therefore, committing a further 127 acts of concealment fraud representing potential regulatory violations of global anti-money laundering fraud laws totaling USD18.30 billion.


Weston is now requesting that Nomura begin discussions to restructure the USD9.15 billion of Nomura / Bank Century securities and loan issuances. Weston is addressing these demands directly to Nomura’s Board of Directors, CEO Okuda, CFO Takumi Kitamura, and recently appointed Independent Director, Laura Unger. Weston is disclosing herein its minimum criteria to Nomura’s Board of Directors to forestall further action by the Weston Ad Hoc Bondholders Group. A partial list of Weston requirements is disclosed for your consideration below:

  1. Weston is calling for NHI to accept Weston’s requirements for Nomura to order an immediate voluntary rescission of all USD9.15 billion Nomura / Bank Century securities cancellations and restore them to their pre-maturity default status while ordering the par value (plus statutory interest) repurchase of USD800 million of the Weston Bondholder Committee owned securities as well as ordering the cash re-payment for USD100.00 for 7,217,207 FGFL Preference Shares, cash re-payment of USD26 million for mistakenly redeemed Westdeutsche Landesbank, London Branch Variable Rate Certificates of Deposit (“VRCDs”) ISIN#XS0177710356 and cash repayment of USD52 million for mistakenly redeemed National Australia Bank (“NAB”) VRCDs ISIN#XS0179785190 due November 30, 2008;

  2. Weston is calling for NHI to agree to self-report and file ex post facto Suspicious Activities Reports (“SARs”) in the jurisdictions of New York, Tokyo, London, and Mauritius with details of each of the 127 Nomura / Bank Century related securities issuances describing specific acts of securities and money laundering fraud to global regulators inclusive of the US SEC, US Department of Justice, US Treasury FINCEN, Mauritius Financial Services Commission, UK FCA and UK NCA;

  3. Weston is calling for NHI to agree to re-deposit USD156 million received from the Tarquin Ltd. / Telltop Holdings Ltd. Swiss Court Decision against PT Bank J Trust Indonesia TBK and the Indonesia Deposit Insurance Corporation in 2015 and forfeit USD87 million of Bank Century wired structuring fees and USD172 million of in-kind upfront bonus consideration Nomura / Bank Century securities issuances paid by Bank Century and Robert Tantular to Nomura under the table from 2003 to 2008. This represents a forfeit of unjust enrichment to be paid to the Weston Bondholders Committee Litigation Recovery Escrow Account;

  4. Weston is calling for Nomura to agree to immediately appoint an independent external auditor to audit and investigate the USD9.15 billion of fraudulent Nomura / Bank Century securities issuances to Bank Century and the USD9.15 billion Aggregate Principal Maturity Redemption defaults at 0.00% of par value for US SEC and UK FCA securities law infractions, NHI, NIP and NBI audit fraud violations, NIP and NBI bank wire fraud violations and anti-money laundering violations, amongst other infractions;

  5. Weston is calling for Nomura to agree to immediately fund the Weston Bondholders Committee to pay for external restructuring advisors and legal advisors fees to advise on the restructuring of the USD9.15 billion Nomura / Bank Century securities issuances in the amount of USD30 million;

Weston notes that the letter to the Nomura Holdings, Inc. Board of Directors should not be construed in any matter whatsoever as a waiver or a novation of the claims made before the Supreme Court of Mauritius (SC/COM/MOT/00079/2016), (SC/COM/WRT/00080/2016), (SC/COM/PWS/01016/2016), (SCR 5A/35/15) and for any pleadings filed before the Supreme Court of Mauritius or any other courts.


In conclusion, Weston notes that the above listed requests must be responded to within fourteen (14) days of receipt of this letter in order for the Weston Ad Hoc Bondholders Committee to forestall further disclosures and legal actions that may result in global regulatory repercussions for Nomura.


REFERENCES:

  1. October 15, 2007 - The New York Times - Nomura Holdings a casualty of U.S. subprime crisis

  2. January 27, 2009 - Financial Times - Nomura eyes asset sales after $3.8bn loss

  3. June 29, 2012 - Financial Times - Nomura admits insider trading mistakes

  4. July 26, 2012 - Reuters - Nomura CEO quits as insider trading scandal widens

  5. July 26, 2012 - International Financing Review - Major business review at Nomura as execs walk

  6. April 17, 2013 - Millennium Post - Italy seizes $2.3 bn from Japan’s Nomura for derivatives fraud

  7. June 17, 2014 - https://en.tempo.co/ - Budi Mulya Subjected to 17 Years Imprisonment in Century Case

  8. July 16, 2014 - The Wall Street Journal - Former Indonesia Central Bank Official Sentenced to10 Years

  9. September 24, 2015 - Financial Times - Nomura books $290m loss over Monte dei Paschi settlement

  10. November 8, 2019 - Financial Times Jail terms for 13 bankers over Monte Paschi scandal

  11. December 17, 2019 - Trib Total Media Firms to pay $386 million to settle price-fixing allegations

  12. March 31, 2021 - business-standard.com - Nomura CEO Kentaro Okuda's honeymoon ends with $2 billion Archegos debacle

  13. April 17, 2021 - Financial Times - EY’s Wirecard audits suffered serious shortcomings, German probe finds

  14. May 21, 2021 - Financial Times - EY audit failings on Wirecard laid bare in ‘dynamite’ report

  15. June 3, 2021 - https://www.risk.net/ - Op risk data: UBS, Nomura, UniCredit hit with $450m cartel fine

  16. January 13, 2022 - Sarawak Report - UMNO Govt Grabs Fine from KPMG For Participating In 1MDB Conspiracy With UMNO Govt

  17. February 3, 2022 - https://mlexmarketinsight.com/ - Nomura faces London High Court claim from Dutch housing body over derivatives losses

  18. February 10, 2022 - Financial Times - Credit Suisse managers knew clients were potential criminals

  19. March 1, 2022 - Financial Times - Archegos and banks in settlement talks amid block trades probe

  20. March 10, 2022 - Financial Crimes Enforcement Network - Financial Action Task Force Identifies Jurisdictions with Anti-Money Laundering and Combating the Financing of Terrorism and Counter-Proliferation Deficiencies

  21. March 24, 2022 - Reuters - Japan arrests, charges SMBC Nikko officials for alleged market manipulation

  22. April 12, 2022 - nikkei Asia - SMBC Nikko case shows that Japanese rules are not made to be broken


2022-04-21 - Press Release - Final - Internal Press Release
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