Nikko Cordial Corp. has bought 108.9 billion yen worth of banks' subordinated bonds in devalued money management funds managed by its subsidiary, Nikko Asset Management Co., to help it reimburse investors, company sources said Friday.
The purchase sheds further light on the question of whether Nikko Asset's management of the funds was appropriate because the firm was investing in such illiquid bonds for managing MMFs, which are supposed to be safe and liquid.
The MMFs, which incorporate Euroyen bonds floated by U.S. energy giant Enron Corp., fell below par value when the financial market was rocked by the news that Enron was on the verge of collapse.