Portfolio holding Nikko Cordial (OTC:NIKOY) said its top executives are stepping down and the company named a new president after improper accounting forced an earnings restatement.
The company stated that President Junichi Arimura and Chairman Masashi Kaneko were to step down yesterday. Shoji Kuwashima, chief information-technology officer and a director, was taking over as President at that time.
Nikko's shares have fallen roughly 15% since this scandal broke a week or so ago. It may be delisted from the Tokyo Stock Exchange. I don't think that will happen -- but it could. You know I own the ADRs trading OTC. The ADRs can be somewhat illiquid and subject to sharp price movements. Last I checked this afternoon they were back up over $10.
I'm holding my Nikko Cordial position (I sold part of my stake previously, reported on this blog) and would recommend anyone else do the same. But you have to do your own due diligence and make up your own mind.
My thinking is that the company will survive, remain listed in Tokyo and continue benefiting from Japan's resurgence. I may be wrong. I may change my mind and dump the company. All I can say right now is that any moves made in this position will be reported in my writing. Like everything else I do.