Sony, the Japanese giant electronics group, is to run its entire treasury operation from London to cut millions of pounds of costs from its bill for changing foreign currency and to escape what it regards as excessive red tape in Tokyo.
Sony said yesterday that it expected to make annual savings of about 7bn yen (£41m) by consolidating its foreign exchange operations, fund raising and management of its financial risk into its new London-based division called Sony Global Treasury Services (GTS).
The decision to site the new treasury operation's headquarters in London will also be a boost for the City, since Sony will raise money to fund its entire business in London's markets.
Yesterday, Sony said that London was not the most effective shelter from tax, but it was attractive because of its "pre-eminence as a financial centre" and the home to foreign exchange expertise. London also spans the time zones of Japan and the United States.
The company will create 10 new jobs, as Sony is expanding its 60-strong London office to make it the centre of its financial operations. It opened the London office in February and will open smaller branches in Tokyo and Singapore later in the year.
Sony, which currently achieves more than 70 per cent of its sales outside Japan, aims to reduce its amount of currency changes triggered by dealing with suppliers in different countries.
The company also aims to improve its hedging of currency movement by co-ordinating it from a central point. Sony predicts its new system will affect about 3 trillion yen of foreign exchange a year.
"We have operations in so many different countries that we have to deal with hundreds of local currencies. We want currencies to be bought and sold in as efficient a way as possible," a spokesman said.
As the company already deals with so many different currencies worldwide, it said it did not regard the issue of whether or not the UK joins the euro as of great importance.
The unusual move to create an entirely separate treasury department reflects a growing desire among Japanese multi-nationals to be free of the country's financial regulations.
One Sony analyst said yesterday: "Markets are changing in Japan but companies like Sony feel constrained because things like online dealing and access to capital are in a more embryonic stage than here."
Teruhisa Tokunaka, Sony's chief financial officer, will remain in Tokyo but the managing director of the treasury department Hiroshi Kurihara has already moved to London.Reuse content