MILAN – Italian prosecutors ordered the seizure of 1.8 billion euros in assets from Nomura <8604.T> and contracts linked to a derivative trade with Monte Paschi to stop the Tuscan lender suffering more losses on the transaction, according to the prosecutors' seizure warrant.
The document, seen by Reuters, said that between February 19 and April 5 of this year, Monte dei Paschi had increased deposits with Nomura by more than 370 million euros to 1.87 billion euros as collateral for the so-called Alexandria trade.
"This requires urgently stemming this landslide of money towards Nomura that is increasing by the day," the prosecutors say in the document explaining why they felt they could not wait for a judge to authorize the seizure.
The Siena prosecutors on Tuesday ordered the seizure of 1.8 billion from Banca Nomura International Plc, a unit of the Japanese bank, and of all contracts related to the Alexandria trade as part of an investigation into a suspected fraud involving Monte dei Paschi.
The Siena prosecutors are also investigating Nomura's former top executive in Europe, Sadeq Sayeed, and Raffaele Ricci, managing director in fixed income sales for the EMEA region, over allegations of aggravated fraud and usury (overpriced loans).
The seizure warrant said Nomura "took advantage of MPS's economic and financial difficulties", colluded with former managers at the Italian bank to conceal losses and engineered "disproportionate and abnormal" contract clauses at the expense of the Tuscan lender.
"All this determined, is determining now and will continue to determine in the future...huge negative consequences for the liquidity and operative functioning of MPS," the document said.
Nomura said on Tuesday none of its assets had been seized in connection with the Monte dei Paschi probe, rejected any suggestion of wrongdoing and said it will take all appropriate measures to protect its position.
Sayeed also denied the allegations. Ricci did not return calls for comment.
A judicial source told Reuters on Tuesday the prosecutors' move had effectively frozen the Alexandria transaction and all related payments had been suspended.
A judge will now have around 10 days to decide whether to confirm the prosecutors' seizure order.
The Alexandria trade is one of a series of derivatives deals carried out under Monte dei Paschi's previous management, which is also under investigation in the probe for alleged fraud, false accounting and obstructing the work of regulators.
(Reporting by Silvia Aloisi; Editing by Carmel Crimmins)