Lehman Brothers sues Marubeni in Japan
Updated: 2008-03-31 16:07
TOKYO -- Lehman Brothers filed a lawsuit against major Japanese trading company Marubeni on Monday, demanding $350 million in a case of alleged fraud.
Lehman Brothers Holdings Inc. is seeking to recoup funding it provided to another Japanese company that the US bank says employees of Marubeni Corp. helped secure.
A Lehman Brothers official who spoke on condition of anonymity, citing policy and the sensitivity of the issue, confirmed the lawsuit was filed in a Tokyo court. He said the lawsuit demands $350 million. Other details were not immediately available.
Marubeni has denied wrongdoing and says it has no obligation to repay the money, which was provided to a unit of LTT Bio-Pharma, a medical consulting company. The unit has since declared bankruptcy.
Marubeni Corp. shares tumbled more than 6 percent in Tokyo to 729 yen -- $7.29 -- in Monday morning trading, on pessimism set off by the fraud allegations, which surfaced over the weekend.
Lehman spokesman Matthew Russell said in a statement that there would be no financial impact on Lehman because of the merits of the lawsuit, appropriate reserves in the first quarter and insurance coverage.
The alleged fraud is the latest challenge for Lehman amid a global credit crunch. The sudden collapse of Bear Stearns earlier added to the concerns that Lehman and other investment banks may also face liquidity problems.
Tokyo-based Marubeni said in a statement Saturday that it did not secure the funding, and documents to that effect are fake. It contends that it is also a victim of the alleged fraud and therefore should not have to cover any damages.
In early March, Marubeni fired two employees after discovering they had used a meeting room at the company's office illicitly. Marubeni says the employees were used by the president of the LTT Bio-Pharma subsidiary in the alleged fraud, but were not directly involved in the document forgery. It did not provide details of what had happened in the meeting at its offices.
Both Lehman and Marubeni say they are cooperating fully with an investigation by the Japanese police.
LTT Bio-Pharma denied involvement in fraud in a statement Monday. It said it had fired the president of the unit linked to the alleged fraud.
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