SINGAPORE/SYDNEY - EMPLOYEES of Lehman Brothers in Asia were nervously waiting to hear their fate on Monday as the loss-making US investment bank stared at potential collapse.

Asia, where Lehman employs about 3,000 staff excluding the India back office, has proved a sweet spot for the US bank as it made inroads into new markets in the region.

'The situation is quite fluid. We haven't heard anything from New York,' a Lehman executive in Singapore, who asked not to be identified due to the sensitivitiy of the situation, told the wires by telephone.

'I guess we'll have to wait for the marching orders.'

The Wall Street bank had expanded aggressively in Asia in the last two years, ramping up foreign exchange and investment banking operations in Singapore, Hong Kong and Mumbai.

It was also planning a bigger presence in China where it recently advised Aluminum Corp of China (Chinalco), which teamed up with Alcoa, on its US$14 billion (S$20 billion) purchase of a stake in Rio Tinto.

For many employees, communication early on Monday was made more difficult because of a holiday in Hong Kong and Tokyo - the bank's larger offices in Asia.

'Everyone is anxious about what is going to happen,' said another Lehman staffer in Singapore by telephone, adding management had circulated notes to staff last week in the face of growing employee concern and impatience.

At Lehman's Singapore office at the downtown Suntec Tower, only a trickle of staff arrived for work, dodging reporters' questions.

At a nearby coffee bar, two Lehman staffers said they had been called at 6am to be at work at 7 am on Sunday.

Asked whether it was business as usual, a Lehman trader contacted by telephone told the wires: 'What business is there?'

'There's nothing to do. All I've heard is what's being reported on the news.'

Uncertainty also prevailed in Australia, where Lehman entered markets last year through the acquisition of local brokerage Grange Securities for about A$120 million (S$140 million).

Earlier this year, the company moved to a new office tower in Sydney's central business district to accommodate its expanded team.

'The negotiations are still ongoing ... basically we don't know where we stand,' said one of the bank's Sydney-based employees.

'Say, for example, there was a filing for Chapter 11, where would that leave all of us ... probably we stand behind other creditors.

'The only thing we could do here is just sit until we hear something more definitive. And almost certainly that would have to happen, I would have thought, before New York opens.' -- REUTERS