Delisting fears hit Nikko shares

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Shares in Japan's third-largest brokerage, Nikko Cordial, plunged 14% on Wednesday, on concerns it may be delisted from the Tokyo Stock Exchange.

The fall came after an investigation at the firm found that former executives had been "actively involved" in inflating the company's profits.

Nikko Cordial admitted last month that it had exaggerated its profits for its financial year to March 2005.

Analysts said there was now a real chance of the firm being delisted.

'Strong possibility'

"It appears there is a strong possibility that [Nikko Cordial] could meet the standards for delisting," said Takahiko Murai, general manager of equities at Nozomi Securities.

"I think investors likely believe there is a good chance that the Tokyo Stock Exchange will delist it."

The independent investigation at Nikko Cordial found that executives had been "actively involved" in the inflation of profits.

It singled out former president Junichi Arimura, former chief financial officer Hajime Yamamoto and another top official, Hirofumi Hirano, as being directly involved.

The report said Mr Arimura had been "in a position to see the whole picture".

All three stood down in December.