SFO flies out to Sumitomo talks

Three Serious Fraud Office investigators fly out to Tokyo today to talk to Japanese officials about the Sumitomo copper scandal.

But an SFO spokesman said they were not expected to see Yasuo Hamanaka, the copper trader who lost pounds 1.2bn for his firm and possibly far more.

"They are to meet our counterparts in the Ministry of Justice to build close relations with the authorities over there," said the SFO.

The SFO team comprises Andrew Jackson, the lawyer conducting the inquiry, Michael O'Brien Kenney, a forensic accountant whose job is to trace the financial links in the fraud, and detective chief inspector Michael Fox of the City of London Police, who is working with the SFO.

The SFO indicated that the visit, which is likely to last only until the weekend, is aimed chiefly at doing the groundwork for a liaison between Japanese and British investigators. This is expected to last a long time, given the complexity of the inquiries into the fraud.

There are rumours Mr Hamanaka is being kept by the Japanese authorities in a "safe house" pending an interrogation.

But Japanese sources said it it was absurd to suggest he had been locked away by the authorities without charge.

One suggestion is that he has been hiding from the Japanese press since he was dismissed by Sumitomo two weeks ago. A Sumitomo spokesman said: "We are not in touch with Mr Hamanaka."

According to a report by the Japanese news agency Jiji Press, the US Commodity Futures Trading Commission questioned Mr Hamanaka for two days in April, well before news of the loss came out.

London Metal Exchange copper yesterday dived to a new 21/2-year low in late afternoon trading on widespread and heavy selling which is bound to increase the losses of Sumitomo Corporation. So far it has rejected claims that these could mount as high as $4bn (pounds 2.6bn).

Some of the selling began just after a statement by Global Minerals and Metals of New York that two of its Chile-based traders had resigned for personal reasons in a development it said was not related to inquiries into losses at Sumitomo.

Three months delivery copper plunged to end at $1,745 a tonne, well down on Monday's $1,818 close. It earlier hit a high of $1,865.

"Copper is heading towards $1,600 ... There is little to stop it," a trader said.