SMBC Nikko Securities Inc. President Yuichiro Kondo on Friday expressed his intention to resign once he finishes leading the brokerage's revamp efforts following a market manipulation scandal that caused former executives to be indicted.
"I would like to step down to take responsibility once the company gets back on track," Kondo told a press conference without giving any time frame. "I apologize from the bottom of my heart for having betrayed everyone's trust."
SMBC Nikko and its parent Sumitomo Mitsui Financial Group Inc. also announced pay cuts for their leadership, with Kondo passing up any compensation for the next six months. Monthly pay for SMFG President Jun Ota will be reduced by 30 percent for the same period.
"I take it very seriously that we brought about a situation like this," Ota, who accompanied Kondo at the press conference, said.
Other executives at the companies are also taking similar pay cuts or returning part of their compensation.
SMBC Nikko illegally propped up some stock prices to stabilize them in transactions called "block offerings" a couple of years ago, according to investigative authorities. Six former executives of the company, including a former deputy president, have been indicted over the practice.
In block offerings, a brokerage mediates trading between large shareholders who want to sell chunks of shares and investors hoping to buy them during off-hours trading. The brokerage profits from the difference between the purchase and sale prices.
Japan's Financial Services Agency last month ordered SMBC Nikko to suspend part of its operations for three months, urging the brokerage to improve compliance, while also instructing SMFG to strengthen its supervision of the subsidiary.
The companies revealed a series of measures to beef up compliance Friday, including allocating more resources to personnel in charge of risk management.