Lehman sues Marubeni over $352 million scam loss

Mumbai: Ailing US investment bank Lehman Brothers has filed a lawsuit against Japanese trading house Marubeni Corp to take back what it claims $352 million it lost in the wake of a financing scam.

The alleged defrauding by consultants working for Marubeni, Japan's fifth biggest trading house, was done through forged documents and an imposter at the trading company's offices in the swindle, Lehman said.

"The fraud by these employees is believed to have been perpetrated against several financial institutions and other parties, including Lehman Brothers," said a spokesman at Lehman Brothers.

Lehman Brothers, which was in the midst of a liquidity problem since the near collapse of Wall Street investment bank Bear Stearns, expects "no financial impact going forward. Lehaman said it has taken appropriate reserves and has applicable insurance coverage.

Marubeni, however, denied any complicity in the case and a spokesman said he was unaware of any other firms being caught up in the fraud.

The loans in question were made last year to finance a revamp of hospitals and lease medical equipment via Asclepius, a now bankrupt unit of drug firm LTT Bio-Pharma Co, and arranged through Marubeni staff, sources said.

When repayment fell due on February 29, Marubeni told the US investment bank that the contract was void because it had been signed with a forged seal.

Lehman Brothers also believes that one of the people it had discussed the loans with had been an imposter.

Lehman said its claim was filed at the Tokyo District Court on Monday morning.

Marubeni, which fired two contract employees involved in the case on March 10, said in a statement that the staff had been manipulated by a former president of Asclepius and had been forced to use company offices without authorisation.

The two contract workers told an internal Marubeni investigation that they had not been involved in forging documents or in Lehman's loan, a Marubeni spokesman said.

The 15-year-old Japanese company, also said it had not approved the leases and that police were investigating the case.

LTT Bio-Pharma said the former president of Asclepius may have been involved in the scam and was fired on March 7 and its own president resigned the same day. But it added in a statement that the company itself had not been aware of any fraud.