Hedge fund Harbinger Capital Partners said on Tuesday it had lost more than a quarter of its stake in sugar maker Tate & Lyle as it has been unable to reclaim them from collapsed bank Lehman Brothers.

Harbinger said 17.7 million shares - worth $131m at current prices - will not be recovered and further shares held by Lehman may also be lost.

The activist investor said the lost shares, held by its Special Fund, had been 'rehypothecated' - deposited with Lehman Brothers in Europe (LBIE) prime brokerage and then sold on.

'The Special Fund believes at this time rehypothecated shares will not be recoverable,' according to a statement by Harbinger.

'Certain non-rehypothecated shares were also held at LBIE and the timings and likelihood of the return of such shares is uncertain at this time,' the statement said, adding Harbinger still holds 42 million shares in Tate & Lyle, equivalent to 9 percent of the voting rights.