Nomura's India fixed-income chief resigns amid reports of inflated profits

Mumbai: Ujjwal Kumar, managing director of Nomura Fixed Income Securities, has resigned amid a media report that its Japanese parent is investigating whether the India fixed-income unit inflated profits in recent years.

Bloomberg, citing people familiar with the matter, reported that Nomura Holdings is probing its India fixed-income business to determine if profits were overstated.

Kumar resigned on November 13 with immediate effect, the company informed the exchanges.


In an email response to ET, Nomura stated, "We categorically deny that there is any investigation by compliance into issues described in this (Bloomberg) article. Nor have any such issues been identified in regular routine reviews of the STRIPS business."

The alleged investigation into the Indian fixed-income division tracks the company incurring a net loss in the September quarter. It posted a ₹19.5-crore loss for the quarter, compared to a year-earlier net profit of ₹66.7 crore. Losses in the second quarter this fiscal were due to mark-to-market losses on securities and derivatives positions. The board of Nomura Fixed Income Securities met to review the quarterly financial performance just two days before Kumar's resignation. The review was signed by Kumar.

Bloomberg reported that Nomura Holdings is examining how the firm valued trades in STRIPS-Separate Trading of Registered Interest and Principal of Securities. These instruments are created by separating the principal and coupon payments of government securities.

According to the report, the probe aims to verify whether the trading desk marked positions to theoretical prices that did not reflect actual market liquidity, inflating profits.

Ujjwal Kumar joined Nomura as head of the fixed-income division in June 2023. Prior to that, he was with Credit Suisse for 12 years, according to his LinkedIn profile.