Citigroup Inc. may seek to take over its Japanese investment banking venture with Nikko Cordial Corp. after an accounting scandal led to the resignation of six top Nikko executives, two people with direct knowledge of the plan said.
Nikko, Japan's third-biggest securities firm, admitted to overstating earnings in 2004. An outside panel found evidence of fraud, and the Tokyo company, whose shares have dropped 19% since Dec. 15, may lose its stock market listing.
Citigroup, a $1.88 trillion-asset New York banking company, is considering a takeover of Nikko Citigroup, which was Japan's No. 4 equity underwriter last year, to preserve client access that may be jeopardized by the scandal, said the people, who declined to be identified because a decision has not been made.
Shannon Bell, a Citigroup spokeswoman in New York, declined to comment. Shinichi Wada, Nikko Cordial's spokesman in Tokyo, said he cannot comment on any specific negotiations.