Two more directors resign at Sumitomo

The $2.6bn Sumitomo copper scandal claimed two more scalps yesterday when the immediate former bosses of the rogue copper trader Yasuo Hamanaka announced their resignations from the board of the giant Japanese group.

Sumitomo also said senior executives would cut their own pay by up to 40 per cent in symbolic atonement for the illegal trading scandal.

Akio Imamura, Mr Hamanaka's direct supervisor, and Mr Imamura's former boss, Ryo Yamakawa, will leave the company on 1 April, nine months after the disclosure of the losses, accumulated during 10 years of unauthorised trades allegedly made by Mr Hamanaka.

In addition, for six months, company executives will forego their bonuses and take symbolic pay cuts ranging from 10 per cent for directors to 40 per cent for the Sumitomo president, Kenji Miyahara. The news comes almost exactly a month after Sumitomo's chairman, Tomiichi Akiyama, announced his departure as a sign of "repentance" over copper trading losses which have cost the company $2.6bn. It emerged yesterday that Mr Yamakawa and Mr Imamura also offered to resign at that stage.

Sumitomo revealed the immense loss in June last year, shortly after firing Mr Hamanaka, its star trader who was known throughout the world for his power to move markets. From the beginning, executives have insisted he acted alone. Mr Hamanaka pleaded guilty to fraud and forgery in the Tokyo District Court last month.

The defence and prosecution agree that no one else in Sumitomo is implicated, but the company's refusal so far to disclose the findings of its internal investigation means almost nothing is known about the details of Mr Hamanaka's deception. In London, the Serious Fraud Office and Securities and Investments Board are conducting enquiries of their own.

Mr Akiyama said he was taking responsibility for the scandal when he resigned last month, but often this is little more than a symbolic gesture. Japanese executives often respond to scandals by resigning, while still continuing to exercise power behind the scenes, and sometimes picking up an increased salary in the process.

Sure enough, the two directors who resigned yesterday have been appointed "advisers" to the company. A spokesman refused to say whether they would continue to be paid.

Earlier this month, Sumitomo attempted to rebut allegations that its own lax controls were partly responsible for the losses. Sumitomo's credit control department said it had set a limit of 100,000 tonnes on the volume of copper warrants Mr Hamanaka could hold on the London Metal Exchange and had denied Mr Hamanaka's repeated requests to increase the limit.