Sumitomo Files Lawsuit Against Credit Lyonnais Rouse in Connection With Losses Incurred as a Result of Yasuo Hamanaka's Unauthorized Copper Trading.

NEW YORK--(BUSINESS WIRE)--July 27, 1999--

Sumitomo Corporation today announced that it has filed a lawsuit against Credit Lyonnais Rouse as part of its ongoing efforts to recover losses arising out of the illicit and unauthorized trading activities of its former employee, Yasuo Hamanaka. The suit was issued in the Commercial Court of the High Court of England and Wales. Sumitomo seeks compensatory damages of approximately $308 million.

Sumitomo claims that Mr. Hamanaka acted in breach of his fiduciary and contractual duties and that Credit Lyonnais Rouse dishonestly assisted Mr. Hamanaka and/or procured a breach of his contract of employment.

Sumitomo Corporation remains committed to pursuing the appropriate opportunities for potentially filing actions against additional third parties, with the goal of recouping some of the losses it experienced in connection with Mr. Hamanaka's illicit activities.

Background on Sumitomo Actions to Resolve Copper Situation and Recover Losses

Immediately upon discovering Hamanaka's unauthorized trading in June 1996, the Company notified the appropriate regulators and government officials, made a public announcement of the losses and terminated his employment. The following September, the Company disclosed that the amount of the losses from Hamanaka's unauthorized trading was approximately $2.6 billion or Y285 billion. The Company also filed criminal complaints against Hamanaka with the Tokyo District Prosecutor's Office for forgery and fraud. Subsequently, Hamanaka was indicted and pleaded guilty on both counts. In March 1998, Hamanaka was sentenced to eight years in prison by a Tokyo District Court Judge. Hamanaka appealed the sentence in the Tokyo High Court. In June 1999, that court rejected his appeal.

In addition, Sumitomo has:

-- Filed, in February 1998, civil charges for approximately $7 million against Hamanaka, his former supervisor Saburo Shimizu and Shimizu's company SCAT Ltd., and frozen $2 million in SCAT funds. The pair are alleged to have embezzled the $7.4 million in a series of complex money transfers from Sumitomo customer accounts.

-- Reached, in May 1998, agreements with regulators in both the U.S. and the U.K. bringing all outstanding regulatory investigations to a close.

-- Reached, in August 1998, an agreement which, if approved by the courts, would resolve the class action lawsuits filed against the Company in New York.

-- Settled, in February 1999, the class action suits filed against the Company in California, after reaching an agreement to resolve them in September, 1998.

-- Successfully recovered, in March 1999, approximately $1 million from Swiss bank accounts belonging to Mr. Hamanaka after seeking and obtaining an order from a Zurich district court.

-- Filed, in June 1999, suits against UBS AG and Chase Manhattan Bank in Tokyo and New York, respectively, for a total of approximately $762 million. The suits allege that UBS and Chase both provided Mr. Hamanaka with loans, disguised as copper derivative transactions, to help him continue his illicit trading activities. Both suits are currently pending.

Headquartered in Tokyo and Osaka, Sumitomo Corporation is one of the world's leading traders and distributors of commodities, industrial goods and consumer goods. Sumitomo is active in a wide range of businesses, including metals, oil, chemicals, construction, real estate, media and communications, electrical machinery, automobiles, ship building and finance.

With 162 offices in five continents, Sumitomo Corporation has assets of approximately $44.0 billion. Its operations in Japan, the United Kingdom, the United States and 86 other countries resulted in sales of $94.2 billion in the fiscal year ended March 1999.