Lehman Brothers return fire in Minmetals legal battle

DOCUMENTS obtained from Lehman Brothers state the trader at the centre of a legal battle between the US investment bank and China's Minmetals was fully authorised to conduct 'risky' derivative-linked deals, directly contradicting statements made by Minmetals Non-Ferrous.

The documents form the core of Lehman's planned court case, which will attempt to prove the trader was operating with the full permission of both Minmetals Non-Ferrous and its parent company, Minmetals.

Lehman and Minmetals have been at loggerheads since the US bank sued the firm for US$52.5 million (HK$405 million) in an attempt to recover alleged bad debts stemming from derivatives-linked deals.

The row flared on Friday when Minmetals Non-Ferrous, a wholly owned subsidiary of Minmetals, counter-sued Lehman for US$128 million alleging the bank lured a young and innocent trader into making derivatives deals he was unauthorised to conduct and unable to understand.

The Lehman documents reveal the bank will argue the trader was fully authorised by all sides, operated with the official sanction of Minmetals and was neither young nor inexperienced.

Minmetals has drawn a distinction between itself and Minmetals Non-Ferrous and has argued the trader in question was employed by its subsidiary and as such was not authorised by Minmetals itself to conduct trades.