A wall of silence on Sumitomo

VIEW FROM TOKYO

As officials from Britain's Serious Fraud Office fly into Tokyo this week, the Great Sumitomo Copper debacle remains surrounded by a fog of unanswered questions.

It is understood the SFO will want to interview Sumitomo officials and the Japanese authorities but it was not clear whether they would meet Yasuo Hamanaka, the trader at the centre of the affair.

Their arrival coincided with news that gave a sombre new dimension to the investigations under way in the US, Japan and London. Police may reopen inquiries into the death in a house fire in Vermont five years ago of Paul Scully, a copper trader who was one of the first to complain to the authorities about Mr Yamanaka's activities.

Some reports suggest that Sumitomo's losses could more than double to $4bn as copper prices continue to tumble. But the essentials of what is known about the case so far could be written on the back of an envelope. Mr Yamanaka's deals were known to no one else, according to Sumitomo, except for a mysterious unnamed employee who quit the corporation eight years ago.

The company remains in sound shape, and is presently investigating the case, along with regulators in New York and London, and the Serious Fraud Office. This much was revealed in a press release put out by Sumitomo after close of trading in New York on 13 June. Since then almost nothing substantive has been added to the account.

How exactly did Mr Hamanaka conceal his losses? How did he fund them and, most important of all, who gained the money which he lost?

Sumitomo is not talking. British diplomats in Tokyo are not talking. The Japanese ministries, who take an overbearingly close interest in the conduct of their companies when times are good, insist that it is none of their business. Mr Hamanaka himself seems for the time being to have disappeared into the fugitive limbo inhabited by Lord Lucan, Elvis Presley and the Marie Celeste.

For enlightenment, it is natural to turn to the people who really know about these matters - the Japanese media. Japan's newspapers and TV news stations are the richest, most highly staffed, most widely circulated and watched in the world. But not one significant nugget of news or insight into the Sumitomo affair has been unearthed by Japanese journalists.

Apart from tracking the movements of Sumitomo's share price, lobbing anodyne questions at Sumitomo representatives at official press conferences, and running background features on the London Metal Exchange and the copper industry, they have been almost entirely passive. Last week the story - about the biggest loss of its kind, suffered by one of Japan's mightiest and best respected coporations - was buried beneath reports of a domestic air crash and the Prime Minister's visit to South Korea. For several days, the leads in the business pages were rehashes from the London and New York papers.

In Japan, every significant politician, every big company, every police department is host to a "kisha club" - a team of reporters who are assigned full-time to walk, talk, eat and drink with their news sources.

It is inconceivable that these men (they are overwhelmingly male) do not have an idea of what is going on inside Sumitomo. But the role of media in Japan is very different from that in the West, and nowhere is this seen more clearly than in business and financial coverage.

A press officer in a big Japanese corporation in Tokyo speaks with disbelief of the authority wielded by his colleagues. Official company announcements are revealed to the kisha club weeks in advance; then follows a period of intense horse-trading as the company press officers lobby for their announcement to be published more prominently than those of rival corporations.

After consultation with their editors, the reporters return with a proposal detailing the page, column and prominence to be given to each news release, which will be published almost verbatim. "If it doesn't appear exactly as agreed," says the press officer, "there are complaints and tantrums. It's unbelievable: these reporters have to apologise and give an account of themselves to the PRs."

Japanese reporters enjoy unprecedented access to corporate goings on. But they are tolerated only on condition that they never report anything remotely controversial or damaging.

As conspiracies go, it is an informal one, depending more on the instinctive caution and self-censorship of individual reporters and editors than on any conscious suppression of facts - Japanese reporters I spoke to last week seemed as puzzled as anyone about the dearth of investigation into Sumitomo.

But there's something fishy about it, all the same. When Daiwa Bank suffered a similar $1.1bn trading loss in New York last autumn, the story was tracked avidly in Japan. But the dodgy dealings in that case were carried out entirely overseas, by a long-term Japanese expatriate who had made America his home.

Yasuo Hamanaka, by contrast, was at the heart of the Tokyo financial establishment, and operated out of one of the corporate citadels of Japan Inc. Perhaps - it is no more than a suspicion - this accounts for the curious lethargy among the business media. Either way, when and if the truth finally comes out, it will be in spite, not because of, Japan News Inc.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Tracy Emin's 1998 piece 'My Bed' on display at Christie's
artOne expert claims she did not
News
Ernesto Che Guevara and Fidel Castro, right, met at Havana Golf Club in 1962 to mock the game
newsFidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
News
Hackers revealed Oscar-winning actress Lawrence was paid less than her male co-stars in American Hustle
people
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Sport
Robin van Persie is blocked by Hugo Lloris
footballTottenham vs Manchester United match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?