STUNG by reports of extensive employee defections, Lehman Brothers - assisted by public relations firm Burson-Marsteller - has gone into damage-control mode in an attempt to repair its tarnished image. Asia-Pacific managing partner James Carbone said yesterday he believed reports about the loss of senior and junior employees from the investment house's fixed income and equity departments had been overblown. ''I don't think that's the story,'' he said. ''The story of Lehman's is [that] we do have a balanced business and the people who have left haven't made a dent in our business.'' Despite Mr Carbone's attempts to play down the recent defections of bond salesman Steven Kim and fixed income specialists Andre Lee and Warren Allderige, sources said it was indicative of a serious morale problem within Lehman. Problems arose while Howard Pollack ran the Hong Kong office before leaving the firm last month, sources said. Mr Pollack's management style was described as ''bark and bite'', a tactic that might have worked well in his native New York but did not sit happily with employees in Hong Kong. ''People don't like to get barked at, so they got their bonuses and took off,'' said a source. ''This is not Wall Street.'' Until a successor to Mr Pollack is hired, Mr Carbone will split his time between Tokyo and Hong Kong. Mr Carbone was described as a ''good guy'' and the right person to smooth ruffled feathers. Mr Carbone said the departure of Mr Kim, who joined Bear Stearns, and Mr Lee and Mr Allderige, who were reportedly joining Peregrine Brokerage, was simply a matter of people who saw an opportunity to establish themselves at another investment firm. ''In this market, enormous salaries can be gained by working for people who don't have a business line and are looking to get into it,'' he said. Poaching of employees by rival firms would continue to be a fact of life in the securities sector, he said. While exorbitant salaries and attractive packages were now being offered by investment houses anxious to build departments, Mr Carbone contended the decision to leave for another investment house was not confined to dollars and cents. ''People don't just go for the money . . . that's not the way the business works,'' he said. ''People have to think about what's in their best interests. People who have a well thought-out career plan clearly don't move for money.'' With the rapid development of Asia's bond sector, fixed-income specialists are in great demand, following the trend of a couple of years ago when Asian equity specialists were snapped up. Earlier this year, Nomura Research Institute enticed four vice-presidents away from J P Morgan. MeesPierson acting managing director Pim Mol said building equity or fixed income departments in the competitive Hong Kong market required a delicate combination of career opportunities and monetary considerations. He said this involved the creation of teams, a comfortable work environment and the ability to offer employees career advancement opportunities in-house. MeesPierson plans to expand its ability to retain research employees with the creation of research operations in Jakarta, Bangkok and Singapore by mid-year, involving the hiring of three heads of research and six analysts.