Jasjit "Jesse" Bhattal, former Asia-Pacific CEO of Lehman Brothers, will step down from his current job as chairman of Nomura Asia at the end of this year, according to an internal announcement seen by FinanceAsia.
A message to Nomura employees from Takumi Shibata, deputy president and COO of Nomura Holdings, said that Bhattal will be leaving, "now that the integration of the Asia businesses has been successfully completed and the value of the acquired businesses has been proven with a significant contribution to the firm". Nomura bought Lehman's Asia operations last September.
The memo added that Bhattal "will continue to provide his counsel and strategic insight as a senior advisor after this period".
Bhattal could not be reached for comment, but insiders say that he will likely start up an Asia-focused boutique firm with former Lehman colleagues. Nomura did not state in its memo who might become Bhattal's replacement.
For Nomura this could be a watershed event and a key question is whether more former Lehman bankers will exit in the coming months. Many were given one- or two-year bonuses at levels equal to those in 2007 to sign on at the Japanese firm -- higher than the typical Nomura bonus package and well above the 2008 bonuses paid at the US banks. Will they stay on to see if they can negotiate continued deals, and assimilate into the firm? Or will they depart after collecting the second part of the bonus for last year, which insiders say will be paid in September? Leaving early will mean entering into a volatile job market, but at least it will not look like they just stayed at Nomura to ride out the downturn or until the end of the bonus deal.
Bhattal's departure is particularly poignant because he is credited with making the Nomura-Lehman deal not only a possibility but a reality. Here's how one insider described how the buyout went down: "We had just been declared bankrupt, the US executive committee told us to sit tight and keep the employees together while they negotiated a deal for the entire global operation. Everyone kept turning up to work hungry for information but with nothing to do. Then, shockingly, the US-based management cut themselves a very special compensation deal with [Barclays Capital] for just the US operation and told us we were on our own. I think that infuriated everyone, but that's when Jesse shone."
"His response was to marshal the troops, get the bid room set up, create a competitive bid environment, negotiate the deal and then ink it with Nomura... within just a few weeks, that saved 3,000 jobs. And this is the cream -- at the executive committee meeting following the deal, when some of the details were being ironed out and when Nomura wanted the Lehman Asia executive committee to take a special compensation deal that would extend their compensation and tenure, Jesse refused to be on a deal that wasn't offered to the rest of the staff (in stark contrast to the way the US management had acted). But he didn't force the rest of the executive committee to do the same, he said they needed to vote on it themselves. He left the room and after some discussion they all agreed to follow Jesse's lead in the best interests of the deal."
It was the talk of the town -- and many rival bankers hailed his leadership decision as an honourable one. But then the integration work began, and many noted that the "supreme decision-making body of the firm" was suspiciously lacking ex-Lehman bankers. Bhattal is a member of the global wholesale committee and the Asia executive management committee at Nomura, but that group included all heads of Asia businesses, and despite its name, isn't the firm's inner sanctum.
Bhattal joined Lehman Brothers in 1993. He served as deputy head of Asia investment banking from 1995 to 1997, and head of Asia investment banking from 1998 to 2000. In 1999, he was made chairman of the Asia-Pacific region, and in July 2000 he was appointed CEO of Asia-Pacific. He joined Lehman Brothers' executive committee in 2003.
Under Bhattal's leadership as CEO, Lehman Brothers Asia achieved five consecutive years of record revenues (2003-2007), leading all global divisions at the firm with respect to pre-tax margins and return on equity, according to Bhattal's CV. He increased Asia revenues to around $2.9 billion in 2007 from $425 million in 2001, a nearly seven-fold increase.
Bhattal received an honours and masters degree in economics from Oxford University as a Rhodes scholar. According to a speech he gave to Rhodes scholars at Oxford in February 2000, Bhattal said: "I ended up in investment banking, I have to admit, by pure accident. A chance encounter at the Oxbridge Club got me an invitation for an interview, and what I thought was going to be a two-year hiatus in New York and London, has been my life for 17 years, and what a marvellous decade and a half it's been."
Nearly a decade later, he will start a new chapter in his banking life.