Citigroup Inc. said Wednesday it has settled a lawsuit against three former executives of subsidiary Nikko Cordial Corp., ending a two-year court battle stemming from an accounting scandal at the firm.

Citigroup settled with Junichi Arimura, the former chief executive officer of Nikko Cordial, and two other former managers, on June 10, according to Nikko Citi Holdings Inc. spokesman Yoshito Shimoyama.

He declined to give details on the settlement. Nikko Cordial sued the three executives for ¥3.4 billion in April 2007.

Arimura, 60, resigned in 2006 after the company was accused of inflating profits. Citigroup, which agreed to buy Nikko Cordial in March 2007 after the accounting scandal sent its stock plunging, struck a deal last month to sell some of its businesses to Sumitomo Mitsui Financial Group Inc. for ¥545 billion.

Citigroup also settled with former Nikko Cordial chief financial officer Hajime Yamamoto, and Hirofumi Hirano, former chairman of Nikko Principal Investments Japan Ltd., Shimoyama said. Hirano left Nikko in 2006 and Yamamoto stepped down in 2007.

Arimura joined investment company OGI Holdings Co. as chairman in 2008. He declined comment, according to his secretary, Miki Azuma. Messages left by telephone at Hirano's offices at AlixPartners Asia LLC in Tokyo were not returned. Yamamoto didn't respond to a telephone message left on the answering machine at his home in Saitama Prefecture.

An outside inquiry in January 2007 led by Masaharu Hino, a former commissioner of the Financial Supervisory Agency, said Yamamoto ignored an audit committee's objections to the treatment of transactions boosting earnings by ¥13.7 billion.

The audit committee, led by Toshihiro Matsumoto, was told by an outside auditor in November 2004 that the company had added a gain from an exchangeable bond transaction to its profit, according to a 100-page report published by Hino.

The settlement isn't related to Citigroup's transaction with Sumitomo Mitsui, Shimoyama said.

Nomura-LIC talks

Kyodo News

Nomura Holdings Inc. has entered the final phase of talks on gaining a considerable stake in LIC Mutual Fund, an asset management company under the wing of Life Insurance Corp. of India, an insurer wholly owned by the Indian government, sources said Tuesday.

Nomura has come close to buying a stake of some 35 percent in LIC for 2.3 billion rupees (¥4.6 billion) to enhance its securities-related operations in the Indian market, where demand is expected to expand, according to the sources.

Japan's largest brokerage has been expanding its Indian operations, including through an agreement last year to purchase an Indian information technology arm of Lehman Brothers Holdings Inc., which went bankrupt in September amid the subprime mortgage crisis.

Nomura's workforce in India had ballooned to about 2,600 people by the end of 2008.

LIC appears willing to let Nomura gain a stake to learn from the Japanese firm's asset management expertise and strengthen its exposure to the international securities business, the sources added.