Sumitomo enlists the aid of Coopers

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The Independent Online
Sumitomo Corporation has asked Coopers & Lybrand to assist in an internal investigation of the company's unauthorised copper trading losses.

The internal investigation comes on top of a series of civil and criminal inquiries in Japan, the US and the UK.

Working with Sumitomo's outside counsel, Coopers has been asked to establish the reasons for the losses - which Sumitomo admits are at least pounds 1.2bn - and determine any weaknesses in management or control systems that may have contributed to the problem.

The auditors will also suggest new or improved controls to ensure unauthorised activity will not recur, Sumitomo said. Kenji Miyahara, Sumitomo president, added: "We are totally committed to doing everything possible to learn what happened.

"When the investigation is complete, we will take whatever steps are required to address these issues, including changes in our systems and procedures of supervision, audit and control."

Separately, Merrill Lynch said banks had sold off most of the copper controlled by Sumitomo on the London Metal Exchange. Union Bank of Switzerland, which took over management of Sumitomo's long positions, liquidated a large number of contracts in late June, and other banks had followed suit, Merrill said. Yasuo Hamanaka, the trader at the centre of inquiries, may have maintained hidden stocks of copper in Sumitomo's name.