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Wednesday 12 November 2008
Panel says BNP Paribas may have broken Japanese insider trading rules
BNP Paribas may have broken Japanese insider trading rules in a finance deal with a property developer that later collapsed, a committee set up by the French bank to investigate the transaction said Tuesday.
Panel says BNP Paribas may have broken Japanese insider trading rules
Reuters 11 November 2008
TOKYO: BNP Paribas may have broken Japanese insider trading rules in a finance deal with a property developer that later collapsed, a committee set up by the French bank to investigate the transaction said Tuesday.
BNP Paribas faces regulatory scrutiny of a $307 million bond and swap deal with Urban Corp.
The chief BNP Paribas representative in Japan acknowledged that the bond deal had been inappropriately handled. Urban, the property developer, eventually collapsed under the weight of its debts.
“We feel seriously responsible for not disclosing details on the deal,” said Yusuke Yasuda, the BNP Paribas manager for Japan. “It was inappropriate.”
Some staff members would face penalties, Yasuda said. But he denied that there had been any insider trading.
The deal was put in place a few weeks before Urban collapsed, owing $2.4 billion, the biggest failure in debt terms by a listed Japanese company in six years.
The Japanese Financial Services Agency is examining the decision not to disclose the swap component of the deal until Urban collapsed Aug. 13 - more than a month after the bond was issued - even though the swap was causing Urban losses and starving it of funds.
The agency is also looking into whether BNP Paribas broke insider trading rules.
The agency has already fined Urban about $15,000 for failing to disclose the full terms of the deal and said last month that it was looking into the role of BNP Paribas.
The committee appointed by BNP, composed of lawyers and executives not connected to the company, said that it was “extremely inappropriate” for the bank to have pressured Urban not to disclose details of the bond offer, adding that this could be a betrayal of its client.
The committee said that it was highly likely that BNP Paribas had violated insider trading rules, and that there was reason to believe that the French bank had pressured Urban not to make the swap public.
Kunihiro Matsuo, a lawyer serving on the committee, said that the bankers involved had been “under pressure to boost profits from headquarters” and wanted to establish a track record by doing a deal with a firm on the main board of the Tokyo Stock Exchange.
Yasuda said BHP management in Tokyo and bankers involved in the deal would face penalties - pay cuts for example - but he added that the bank had not yet decided on specific punishments.
BNP Paribas will continue equity and bond underwriting businesses in Tokyo, he said.
In Paris, BNP Paribas shares dropped 5.6 percent to 49.74 in afternoon trading, roughly in line with the DJ Stoxx European banking sector index.
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Panel says BNP Paribas may have broken Japanese insider trading rules
Reuters
11 November 2008
TOKYO: BNP Paribas may have broken Japanese insider trading rules in a finance deal with a property developer that later collapsed, a committee set up by the French bank to investigate the transaction said Tuesday.
BNP Paribas faces regulatory scrutiny of a $307 million bond and swap deal with Urban Corp.
The chief BNP Paribas representative in Japan acknowledged that the bond deal had been inappropriately handled. Urban, the property developer, eventually collapsed under the weight of its debts.
“We feel seriously responsible for not disclosing details on the deal,” said Yusuke Yasuda, the BNP Paribas manager for Japan. “It was inappropriate.”
Some staff members would face penalties, Yasuda said. But he denied that there had been any insider trading.
The deal was put in place a few weeks before Urban collapsed, owing $2.4 billion, the biggest failure in debt terms by a listed Japanese company in six years.
The Japanese Financial Services Agency is examining the decision not to disclose the swap component of the deal until Urban collapsed Aug. 13 - more than a month after the bond was issued - even though the swap was causing Urban losses and starving it of funds.
The agency is also looking into whether BNP Paribas broke insider trading rules.
The agency has already fined Urban about $15,000 for failing to disclose the full terms of the deal and said last month that it was looking into the role of BNP Paribas.
The committee appointed by BNP, composed of lawyers and executives not connected to the company, said that it was “extremely inappropriate” for the bank to have pressured Urban not to disclose details of the bond offer, adding that this could be a betrayal of its client.
The committee said that it was highly likely that BNP Paribas had violated insider trading rules, and that there was reason to believe that the French bank had pressured Urban not to make the swap public.
Kunihiro Matsuo, a lawyer serving on the committee, said that the bankers involved had been “under pressure to boost profits from headquarters” and wanted to establish a track record by doing a deal with a firm on the main board of the Tokyo Stock Exchange.
Yasuda said BHP management in Tokyo and bankers involved in the deal would face penalties - pay cuts for example - but he added that the bank had not yet decided on specific punishments.
BNP Paribas will continue equity and bond underwriting businesses in Tokyo, he said.
In Paris, BNP Paribas shares dropped 5.6 percent to 49.74 in afternoon trading, roughly in line with the DJ Stoxx European banking sector index.
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