Lehman is seeking to recoup 35 billion yen (S$483 million) it loaned to a fund run by a unit of Japanese biotechnology company LTT Bio-Pharma Co, a Lehman official said on condition of anonymity, citing the sensitivity of the case. The funds were secured by the trading company Marubeni Corp.

A unit of LTT-Bio Pharma, a medical consulting company that acted as the fund organiser, filed for bankruptcy on March 19, leaving investors stuck with massive outstanding loans that were misappropriated in the alleged fraud.

Lehman's Japan unit, Lehman Brothers Japan, plans to file a civil suit on Monday at the Tokyo District Court to demand Marubeni pay back the loans it secured, the company official said.

Marubeni has denied any wrongdoing and has said it is doesn't have to cover any damage from the fund because the deal involved fake documents. The company fired two of its employees for allegedly collaborating with the fund organiser to forge documents, and has filed a separate criminal complaint against the fund operator.

Lehman contends that in addition to its securing the loans, Marubeni is responsible for repayment because meetings were held at the Marubeni office to discuss the fund before the agreement was struck late last year.

Officials of LTT-Bio-Pharma, its bankrupt unit and its lawyer were not available for comment Sunday. -- AP