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. It also alleges Minmetals Non-Ferrous was prevented by Chinese law from conducting derivative-based trading. Minmetals legal documents state: 'Minmetals Non-Ferrous has no authority to engage in the trading of foreign exchange products, including foreign currency options, forwards, futures or any other form.' It added neither Lehman nor Minmetals Non-Ferrous had ever obtained documents authorising derivative-based deals signed by a Minmetals executive, and so the parent company was not liable for debts generated by its subsidiary. Minmetals has also filed a separate motion requesting Lehman drop its suit against the parent company. But the document obtained from Lehman directly contradicts these claims. Written by Minmetals, it states: 'We are pleased to note . . . your willingness to place at the disposal of Minmetals International Non-Ferrous Metals Trading Company . . . facilities in respect of their operations on all or any of the world's commodities, bullion, metal, securities, foreign exchange, index, financial instruments and options markets and futures markets of any sort.' The document added: 'We confirm the acceptance of the above facilities by Minmetals International Non-Ferrous Metals Trading Co is made with our full knowledge and consent. 'We hereby confirm our company legally and beneficially owns 100 per cent of Minmetals International Non-Ferrous Metals Trading Co.' A Lehman source pointed out the document is signed by a Minmetals employee, authorises the use of all types of derivative instruments and argued it guarantees any debts generated by Minmetals Non-Ferrous. 'Minmetals provided Lehman with letters of undertaking that specifically contemplated Lehman making available its facilities to Minmetals for all manner of financial transactions . . . of any sort. 'In light of the broad range of financial and trading activities identified in the letter of undertaking, the notion that Minmetals was intending to restrict itself solely to the trading of copper and other metals is particularly unsupportable,' said the source. The source added the document 'creates an obligation on the part of Minmetals to satisfy any obligations of Minmetals Non-Ferrous to Lehman which Minmetals Non-Ferrous refused to meet'. Minmetals' lawyers have rejected any such claim and have argued the letter of undertaking was addressed to a London subsidiary of Lehman Brothers not named in the suit. They add it does not represent a contractual agreement between Minmetals and Lehman and in no way represents a guarantee for debts generated by Minmetals Non-Ferrous.