Nikko Cordial

Nikko Cordial was the former English-language brand associated with a major Japanese securities group and its holding company, Nikko Cordial Corporation, formally known as Nikko Cordial Group. Its principal operating business was Nikko Cordial Securities, a Japanese retail and corporate securities firm. Before its restructuring, the brokerage was described as Japan's third-largest securities company, giving the group an important position in domestic retail brokerage, corporate securities services, underwriting, and related capital-markets activities. The group also maintained an investment-banking, trading, and research relationship with Citigroup through Nikko Citigroup. This relationship became decisive after a corporate scandal involving former Nikko Cordial executives. The company brought a civil action against three former executives, including former chief executive officer Junichi Arimura, seeking ¥3.4 billion over alleged fraud. The scandal was followed by a reported 32.9% decline in profits and contributed to the change in ownership and control of the group. In 2007, Citigroup acquired a majority shareholding in Nikko Cordial for a reported $7.7 billion. In 2008, Nikko Cordial Corporation became a wholly owned Citigroup subsidiary. Following a share exchange, it was combined with Citigroup Japan Holdings Ltd. to create Nikko Citi Holdings Inc.; that entity was renamed Citigroup Japan Holdings Corp. in 2009. These transactions ended Nikko Cordial's existence as an independent listed Japanese securities group, while preserving parts of its business within Citigroup's Japanese platform. A further restructuring took place in October 2009, when the operations of Nikko Cordial Securities and selected Nikko Citigroup businesses—including domestic stock and bond underwriting—were sold to Sumitomo Mitsui Financial Group. The transferred operations were subsequently reorganized into SMBC Nikko Securities Inc. in April 2011. Accordingly, Nikko Cordial is best understood as a historical Japanese financial-services brand rather than an active standalone company. Its legacy survives mainly through the securities and investment-banking businesses that passed into Citigroup and then SMFG ownership.

Nikko Cordial was the corporate and commercial identity of a significant Japanese securities group, centered on Nikko Cordial Securities and supported by the Nikko Cordial holding company. The securities business served both retail customers and corporate clients, while associated activities included investment banking, trading, research, and domestic equity and bond underwriting. Before its later ownership changes, Nikko Cordial Securities was regarded as Japan's third-largest brokerage. The group became embroiled in a fraud-related scandal involving former executives. Nikko Cordial pursued three former executives in a civil lawsuit, naming former chief executive officer Junichi Arimura among them and seeking ¥3.4 billion. The episode damaged the group's financial performance; reported profits fell by 32.9% after the scandal. Citigroup ultimately settled the lawsuit in June 2009. Citigroup acquired a majority shareholding in Nikko Cordial in 2007 for a reported $7.7 billion. The transaction led to full ownership in 2008, when Nikko Cordial Corporation became a wholly owned Citigroup subsidiary. Through a share exchange, it was merged with Citigroup Japan Holdings Ltd. to form Nikko Citi Holdings Inc. The entity changed its name to Citigroup Japan Holdings Corp. in 2009, marking the end of Nikko Cordial as an independent corporate group. The Japanese operations were subsequently reorganized again. In October 2009, Nikko Cordial Securities and certain Nikko Citigroup businesses were sold to Sumitomo Mitsui Financial Group. The assets included domestic stock and bond underwriting and other securities activities. The transferred operations were reorganized into SMBC Nikko Securities Inc. in April 2011. Nikko Cordial therefore survives as a historical brand and predecessor business rather than as an active standalone securities company.

• 2011

  SMBC Nikko Securities is organized

  [1]Nikko Cordialen.wikipedia.org

  The businesses acquired from the Nikko platform were reorganized into SMBC Nikko Securities Inc.

• 2009

  Corporate name changes and business sale

  [1]Nikko Cordialen.wikipedia.org

  The combined holding company changed its name to Citigroup Japan Holdings Corp.; later that year, major Nikko operations were sold to Sumitomo Mitsui Financial Group.

• 2008

  Nikko Cordial becomes wholly owned by Citigroup

  [1]Nikko Cordialen.wikipedia.org

  Nikko Cordial Corporation became a wholly owned Citigroup subsidiary and was combined with Citigroup Japan Holdings Ltd. through a share exchange.

• 2007

  Citigroup acquires majority control

  [1]Nikko Cordialen.wikipedia.org

  Citigroup acquired a majority shareholding in Nikko Cordial in a transaction reported at $7.7 billion.

Japanese full-service securities and capital-markets group serving retail, corporate, and institutional customers.

• Retail and corporate securities

  Nikko Cordial Securities

  The group's principal securities business, serving retail and corporate customers in Japan. Its activities formed part of the operations later transferred to Sumitomo Mitsui Financial Group and reorganized as SMBC Nikko Securities.

• Investment banking and capital markets

  Nikko Citigroup

  A Citigroup-related joint venture and business platform covering investment banking, trading, research, and selected securities activities. Certain operations, including domestic stock and bond underwriting, were later sold to Sumitomo Mitsui Financial Group.

• Fraud allegations involving former executives

  Nikko Cordial sued three former executives, including former chief executive Junichi Arimura, seeking ¥3.4 billion over alleged fraud. The scandal was associated with a reported 32.9% decline in profits, and Citigroup settled the lawsuit in June 2009.

  Source

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• 2009

  Sell Japanese securities operations to SMFGM&A

  Background

  Citigroup reorganized its Japanese operations after taking control of Nikko Cordial and its related securities businesses.

  Action taken

  Nikko Cordial Securities and selected Nikko Citigroup businesses were sold to Sumitomo Mitsui Financial Group.

  Aftermath

  The transferred operations were reorganized into SMBC Nikko Securities Inc. in April 2011.

  Source

• 2007

  Accept Citigroup majority investmentM&A

  Background

  Citigroup acquired a majority shareholding in Nikko Cordial during a period of ownership and governance change surrounding the securities group.

  Action taken

  Citigroup purchased majority control in a transaction reported at $7.7 billion.

  Aftermath

  Nikko Cordial became wholly owned by Citigroup in 2008 and was subsequently integrated into Citigroup's Japanese holding structure.

  Reported transaction value. $7.7 billion (2007)

  Source

• 2009

  Nikko Cordial businesses sold to Sumitomo Mitsui Financial Group[1]Nikko Cordialen.wikipedia.org

  M&A

  Nikko Cordial Securities and selected Nikko Citigroup operations, including domestic stock and bond underwriting, were sold to Sumitomo Mitsui Financial Group.

• 2008

  Nikko Cordial becomes a wholly owned Citigroup subsidiary[1]Nikko Cordialen.wikipedia.org

  M&A

  Nikko Cordial Corporation became wholly owned by Citigroup and was combined with Citigroup Japan Holdings Ltd. through a share exchange.

• 2007

  Citigroup acquires majority shareholding in Nikko Cordial[1]Nikko Cordialen.wikipedia.org

  M&A

  Citigroup acquired a majority stake in Nikko Cordial in a transaction reported at $7.7 billion.

1. 1Nikko Cordialen.wikipedia.org