FLORENCE May 14 Italy's highest court has asked
a lower tribunal to reassess whether investment bank Nomura
committed fraud against Banca Monte dei Paschi di Siena
through a large derivative contract, raising the spectre of a
possible asset seizure.
The court dismissed, however, allegations that the Japanese
bank had pocketed abnormal gains from the contract, known as
"Alexandria", according to a transcript of the ruling reviewed
Monte dei Paschi, Italy's third-biggest bank by
branch number, was on the verge of collapse in 2012 after being
hit by the euro zone crisis and risky derivative deals. The
largest of these structured trades, Alexandria, is still in
Italian prosecutors investigating the derivative contracts
at Monte dei Paschi ordered in April 2013 the seizure of 1.8
billion euros of Nomura's assets, a move aimed at preventing
Monte dei Paschi from putting up more cash with Nomura to meet
the collateral requirements of the Alexandria trade.
Later that month, a judge blocked the prosecutors' request
saying there was no evidence the Japanese broker had made
wrongful or disproportionate gains from the structured trades.
An appeals court upheld that ruling on July 13.
Prosecutors lodged a final appeal with Italy's Cassation
Court, the country's highest tribunal.
In its ruling, the Cassation Court asked a Siena-based court
to reassess whether the content of a so-called "mandate
agreement" linking the Alexandria notes to a further derivative
contract on 30-year Italian government bonds had been clearly
communicated to Monte dei Paschi.
Any potential seizure of Nomura assets would be
significantly smaller than the initial request for 1.8 billion
euros because the Cassation Court has decided to dismiss the
allegation of usury, a legal source with direct knowledge of the
Nomura has repeatedly denied any suggestion of wrongdoing.
It and Monte dei Paschi declined to comment on Wednesday.
Monte dei Paschi is seeking 700 million euros in
compensation from Nomura and two of its former bank executives.
The Tuscan bank dropped a parallel request for compensation
from Deutsche Bank after reaching a deal in December to close a
loss-making derivative contract known as "Santorini".
(Reporting by Silvia Ognibene; Additional reporting by Lisa
Jucca, editing by David Evans)