Lehman Brothers which appears to have been conned out of more than $350M is suing Marubeni, a Japanese trading company, for failing to repay Y35bn in financing and fees that it allegedly owes.
Marubeni claims it has nothing to do with the transaction at the heart of the claim but says it was itself the victim of a fraud perpetrated by individuals for whom it is not responsible.
Lehman agreed last autumn to provide funds to a medical business apparently linked to Marubeni and was due to receive its first repayment and fees on February 29. The US investment bank -
FT reports, had not done much previous business with the Japenese trading company - Marubeni. The funds were ultimately provided to a third party, Asclepius. But Lehman claims to have believed Marubeni was the counterparty to the deal for a number of reasons.
The two people central to the deal, Shingo Yamaura and Takuro Nitahara, were at the time senior leaders in Marubeni’s Life Care Business Department. Further, Lehman met a man identified as general manager of the Life Care Business Department, Koichi Sato, at Marubeni’s head office in November 2007. The US investment bank was provided with various documents that carried Marubeni’s seal – including one that explained that Marubeni had officially approved of the transaction.
Another document provided by the men involved that seemed to support the legitimacy of the transaction, showed that Goldman Sachs had been a party to a similar deal, according to Lehman’s filing with the Tokyo District Court.
The deal turned sour when Marubeni failed to provide the first repayment and then claimed that the transaction documents had been forged and it knew nothing about the deal.
In a further twist, Mr Sato, the Marubeni general manager whom Lehman staff met and who visited Lehman’s office in Tokyo, where he was photographed, was an imposter.
When, following Marubeni’s non-repayment, representatives of the US investment bank asked to meet Mr Sato, the man who appeared before them was not the one they had met before.
To complicate matters, the third party to which Lehman provided the financing, Asclepius, filed for bankruptcy this month.
Lehman claims that whether or not the documents were forged or whether the whole transaction was masterminded by a few unscrupulous employees, Marubeni is still responsible for the outcome.
Lehman said Saturday, "Lehman Brothers Japan Inc. today confirmed that it is working closely with the authorities to seek full recovery of funds it believes to have been fraudulently misappropriated from transactions in which an affiliate provided financing."
The courts will have to decide who is liable.
How Lehman Brothers got conned out of $350 million
