Nikkei Loses $29 Million In Fraud Through US Subsidiary

Investigators are examining an alleged fraud that cost Japan’s largest financial media organization $29 million, Nikkei Inc. announced Wednesday.

The alleged fraud occurred last month and involved Nikkei’s U.S. subsidiary, Nikkei America. In a statement, the company said the fraud had been perpetrated by a “malicious third party” posing as a Nikkei executive.

“Shortly after, Nikkei America recognized that it was likely that it had been subject to a fraud, and Nikkei America immediately retained lawyers to confirm the underlying facts while filing a damage report with the investigation authorities in the U.S. and Hong Kong,” Nikkei said. “Currently we are taking immediate measures to preserve and recover the funds that have been transferred and taking measures to fully cooperate with the investigations.”

Nikkei said $29 million or 3.2 billion Japanese yen were transferred.

No further details were released.

The employee-owned Nikkei publishes the Nikkei 225 stock index and owns the Financial Times and Nikkei Asian Review, as well as the Chinese Nikkei newspaper and a broadcast channel that covers all of Asia. In 2018, it reported a 20% drop in profits from 2017 to $47 million. Its flagship Nikkei newspaper has 2.4 million subscribers.

Fraudsters are increasingly targeting international transactions to steal large sums. Cybercriminals stole $81 million from Bangladesh’s central bank in 2016 through a series of transactions routed through the New York Federal Reserve en route to accounts in the Philippines and Sri Lanka.

In 2008, Lehman Brothers sued the Japanese trading house Marubeni for $352 million after fraudsters posing as Marubeni executives used corporate stamps on documents and hosted negotiations at Marubeni headquarters.

Nikkei says it is dedicated to the “peaceful and democratic development of the Japanese economy” through “unbiased, comprehensive journalism of quality and reliability.”

Nikkei, which was established in 1876, employees more than 3,000 people in 54 news bureaus in Japan and 37 locations overseas.