[ by Melanie Gretchen ] Nomura Holdings, Japan's largest brokerage, had high hopes in 2008 when it acquired the European and Asian operations of bankrupt Lehman Brothers Holdings.  Nomura's strategy was to develop a global presence and boost profits by hiring expensive bankers.  All the people and pieces were in place, Nomura thought. Among the 8,000 Lehman employees who joined Nomura were Jesse Bhattal, who became the highest-ranking ex-Lehman executive at Nomura Holdings, and Tarun Jotwani, who became head of Nomura’s global markets unit.  However, the business units stumbled from the outset and left Nomura with billions of dollars in losses.

According to Yuri Yoshida, an S&P senior analyst in Tokyo, the resignations show that Nomura's strategy "to boost profit by hiring expensive bankers ... isn’t going to work."  He said, "The business model, which Lehman perfected, is old and won’t work under the new regulatory regime and current market conditions."

Nomura's Silver Lining. However, all may not be lost because of the resignations.  The abrupt exits may allow Japan’s biggest brokerage to revamp a business that failed miserably under the guidance of these highly regarded executives.  Nomura is also faced with crucial decisions:  whether to replace Mr. Bhattal with an experienced global banker to foster expansion, or with an in-house local to focus on the home business. Mr. Bhuttal departs after Nomura reported a $12 billion (¥73 billion) pre-tax loss in the quarter ending last September.  He also leaves behind a division that will "go under the knife" as part of a $1.2 billion cost-reduction plan.  Meanwhile, Tarun Jotwani's division will be split up following his departure. Distinguished Careers (pre-Nomura). Formerly head of Lehman's Asian business, Indian-born Jesse Bhattal, 55, was the most senior foreign executive at Nomura and the only non-Japanese member of its management board.  Since he joined the company in April of 2010, he had become a divisive figure within the group and was forced out after pushing for cost cuts - though he was expected to stay with the group until March or April, according to people familiar with the situation. Bhattal, a former Rhodes Scholar at Oxford University, joined Lehman in 1993.  He was appointed president of Nomura’s newly created wholesale division in March 2010 as the Japanese firm sought to stem the flow of resignations by former Lehman employees after guaranteed bonuses were paid out.  In that role, he was instrumental in keeping the former Lehman unit in place.

"Bhattal kept Lehman’s franchise and people and helped Nomura resurrect business ties with certain clients that the U.S. bank used to have," said Masao Muraki, an analyst at Deutsche Bank AG in Tokyo.  "But the point is, Nomura keeps posting losses overseas."

Global markets head Tarun Jotwani, 51, joined Lehman in 1995, where he held several posts including head of Indian operations.  He was appointed chief of Nomura’s global markets division in March last year, overseeing the bank’s equities and fixed-income units. [Financial Times, 1/11/12]   [Reuters, 1/11/12]   [Bloomberg, 1/10/11]