September 23, 2019

Italy Orders Seizure of $2.35 Billion in Siena Bank Inquiry

The unusual move to seize such a large sum, and go after prominent bankers, underlined the importance of the case in Italy and the euro zone, where it has contributed to jitters about the country’s ability to rebuild the economy and survive the financial crisis.

Prosecutors said the former head of Nomura in Europe, Sadeq Sayeed, was a target of the investigation. Mr. Sayeed, who retired in 2010, denied any wrongdoing and said he had not learned of the accusations until asked about them by reporters on Tuesday. Another senior Nomura executive, Raffaele Ricci, is also a target of the inquiry, prosecutors said. Mr. Ricci could not be reached for comment.

The new moves by Italian prosecutors also intensify the pressure on Nomura, and are a sign that the authorities are not letting up in their efforts to find out whether anyone bears criminal responsibility for transactions that left Monte dei Paschi in need of a €4 billion, or $5.25 billion, bailout by the Italian government and unable to fulfill its traditional role as benefactor to the community of Siena, a small Tuscan city.

The bank, founded more than five centuries ago, is the oldest in the world and the third-largest bank in Italy. A foundation that was the bank’s main shareholder used its share of profits to help pay for services like day care, ambulances and even the Palio, the bareback horse race that is the city’s trademark.

But the scandal surrounding the bank has reverberated well beyond the medieval streets of Siena and its 55,000 people. The bank’s problems, and the questions of who was to blame, played a role in the election campaign this year that left Italy so factionalized that a new national government has still not been formed. The lack of a strong government in Italy remains a risk to the euro zone. Meanwhile, the country’s struggling banks are unable to provide enough credit to support an economic recovery that Italy badly needs.

Nomura has been sued by the new management of Monte dei Paschi for helping to design transactions that may have allowed previous managers at the bank to hide losses from regulators and shareholders.

In a statement, Nomura said that no assets had been seized yet. “We will take all appropriate steps to protect our position and will vigorously contest any suggestions of wrongdoing in this matter,” the bank said, declining to elaborate further.

The Siena prosecutor’s office said in a statement that most of the assets to be seized were collateral that Monte dei Paschi had posted with the Italian unit of Nomura in return for a loan. The operation was carried out by the Italian financial police in Siena, Rome, Milan and Bologna, as well as in the southern Italian city of Catanzaro, prosecutors said.

In addition, the authorities ordered the freezing of assets in accounts of three former executives of Monte dei Paschi who are also under investigation: €2.3 million from Giuseppe Mussari, former chairman of the bank; €9.9 million from Antonio Vigni, the former director general; and €2.2 million from Gianluca Baldassarri, the former chief financial officer. Mr. Baldassarri has been under arrest since February.

Prosecutors said Mr. Mussari, Mr. Vigni and Mr. Baldassarri were suspected of obstructing the functions of regulators and misrepresenting corporate assets, as well as other possible misdeeds. No formal charges have been filed against any of the people under investigation.

Italian news reports had previously mentioned Mr. Sayeed in connection with the case, but Tuesday marked the first time that prosecutors officially confirmed that he was a target of the investigation. Speaking by telephone from London on Tuesday, Mr. Sayeed said, “I completely and absolutely and vigorously deny any allegations,” which he said had “no basis in fact.”

This article has been revised to reflect the following correction:

Correction: April 16, 2013

A headline with an earlier version of this article misstated the amount of assets seized from Nomura. It was $2.35 billion, not $1.8 billion.

Article source: http://www.nytimes.com/2013/04/17/business/global/italy-seizes-nomura-assets-linked-to-siena-bank-inquiry.html?partner=rss&emc=rss

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