Lehman Brothers Holdings Inc. said it plans legal action against Marubeni Corp. to recover funds ``fraudulently misappropriated.'' Marubeni said it's also a victim in the fraud that media reports put at as much as $403 million.
The Wall Street Journal reported today that Lehman loaned funds to a consulting company owned by LTT Bio-Pharma Co. to buy medical equipment. The loan appeared to be guaranteed by Marubeni and involved forged documents, the Journal said.
``We are confident in our legal claim, which we will pursue until we receive repayment from Marubeni,'' said Matthew Russell, head of corporate communications for the Asia-Pacific region at Lehman in Hong Kong. He declined to comment on the amount being sought or other companies involved.
Marubeni, Japan's biggest petrochemical importer, is also a victim of fraud and was not involved in the transaction, the company said in a Japanese-language statement faxed to Bloomberg News. Takashi Hashimoto, a spokesman for the Tokyo-based trading house, declined to comment on Lehman's planned legal action.
The funds loaned to the medical consulting company range from 24 billion yen to 40 billion yen ($242 million to $403 million), according the Nikkei and Tokyo newspapers. Both newspapers cited unidentified people familiar with the situation. The Wall Street Journal put the amount at about $250 million.
``After we became aware of the fraud, we launched a fact- finding investigation and then informed the appropriate authorities,'' Lehman said in an e-mailed statement earlier today. ``We are confident that we undertook all the appropriate measures on the transaction and will commence legal action against Marubeni.''
Criminal Complaint
Lehman officials said they have filed a criminal complaint with Japanese police, the Wall Street Journal reported.
The medical consulting company is called Asclepius Ltd., which initiated bankruptcy proceedings March 19, the Nikkei newspaper said. A call to the main switchboard at LTT Bio- Pharma reached a recorded message saying the office is closed today and tomorrow.
LTT Bio-Pharma is a Tokyo-based biotechnology company that researches and sells drug-delivery systems to treat arteriosclerosis. The company went public in November 2004 on the Tokyo Stock Exchange Mothers market. The shares have fallen 82 percent in the past 12 months.
The planned legal action by Lehman in Japan comes as U.S. regulators are investigating whether traders spread false rumors about the company's financial soundness to profit from a decline in its share price. The Securities and Exchange Commission inquiry isn't public.
Lehman, the fourth-largest U.S. securities firm, has tumbled 23 percent this month amid speculation that Wall Street firms can't fund their operations.
No comments:
Post a Comment