(Reuters) -Japanese investment bank Nomura Holdings on Monday denied a Bloomberg News report that it was investigating its India fixed-income unit over profit inflation in recent years.
Bloomberg News reported earlier in the day, citing people familiar with the matter, that the company was asking senior officials in its rates division to determine whether profits were inflated in recent years.
“We categorically deny that there is any investigation by compliance into issues described in this article. Nor have any such issues been identified in regular routine reviews of the STRIPS business,” Nomura told Reuters.
STRIPS, or separate trading of registered interest and principal of securities, allows dealers to sell principal and interest payments independently.
In June, India’s central bank permitted STRIPS trade for state government bonds.
Nomura’s investigation highlights concerns about STRIPS, which have become a hotspot for accounting practices that overstate reported gains, the report had said.
(Reporting by Komal Salecha in Bengaluru and Miho Uranaka in Tokyo; Editing by Eileen Soreng)
