The London Metal Exchange has drafted in Citigate Corporate to give
crisis management and corporate communications advice to combat
allegations over its role in the Sumitomo copper scandal.
Citigate was hired last week - just days before a BBC Panorama programme
about the scandal was broadcast. Panorama accused LME of misleading the
copper markets by not revealing what it knew about the trading
activities of Yasuo Hamanaka. His dealings left the Sumitomo Corporation
with losses of pounds 1.6 billion and prompted the collapse of copper
prices last May.
Although neither the LME nor Citigate were prepared to comment on the PR
campaign, sources suggest that the agency’s main task is to neutralise
negative fall out from the Panorama programme and to built LME’s
reputation as a well-managed international market. The exchange is also
anxious to rebuff the rival claims of other copper markets, particularly
Nymex, the New York Mercantile Exchange.
Target audiences are likely to include metal traders across the globe,
industrial corporations which buy large amounts of copper, brokers and
City institutions. Work is being led by Citigate Corporate’s managing
director Simon Brocklebank-Fowler.
Yasuo Hamanaka pleaded guilty to charges of fraud and forgery in court
in Japan on Monday. The plea leaves questions unanswered about how he
kept massive trading losses a secret for ten years and whether there was
a deliberate attempt to manipulate world copper prices.