LONDON (Kyodo) Britain's high court is set to open hearings on a 1996 copper trading case involving a trader of Sumitomo Corp., five years after the trading house filed a $695 million damages lawsuit against a metal broker for helping the trader in illegal transactions, the Press Association reported.
The British news agency said the Commercial Court of the High Court of England and Wales will open the trial on Thursday for the suit filed by Sumitomo in 1999 against London-based Credit Lyonnais Rouse Ltd., which is now a member of the Calyon Corporate and Investment Bank group of France.
Sumitomo claims the metal broker was involved in the copper transactions with Sumitomo trader Yasuo Hamanaka, even though it knew the former head of Sumitomo's nonferrous metal department was conducting unauthorized trades.
Hamanaka's illegal trading incurred losses of $2.6 billion at the trading company. Sumitomo is also demanding that the broker pay interest earned, according to the news report.
Credit Lyonnais Rouse alleges Sumitomo's claim is groundless because it has not conducted any illegal transactions. The high court is expected to hand down a ruling in seven to eight months, the news agency said.
Hamanaka, who was once dubbed "Mr. Five Percent" because of his control of that proportion of the global copper trade, was fired by Sumitomo in June 1996 after the trading house discovered that he had accumulated massive losses in unauthorized trading, mainly on the London Metal Exchange, over 10 years.
He was convicted of fraud and forgery in 1999 in Japan and has been serving an eight-year prison term.