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UFJ and another bank, Mitsubishi Tokyo Financial Group Inc., already have an agreement announced in August to merge their operations by October 2005. UFJ is Japan's fourth biggest bank, and is smaller than its two suitors.

But Sumitomo Mitsui has also been eager to acquire UFJ, and has continued to lobby for its own offer despite having been spurned earlier.

Sumitomo Mitsui said Thursday it has acquired 300 shares in UFJ, and that will enable it to make counter proposals as a shareholder at UFJ's shareholders meeting expected next June, when UFJ and Mitsubishi Tokyo plan to seek shareholder approval for their merger proposal.

Sumitomo Mitsui spokesman Takashi Morita refused to give other details about the purchase of UFJ shares. UFJ and Mitsubishi Tokyo said they had no comment on Sumitomo Mitsui's stock purchase.

Sumitomo Mitsui officials have repeatedly said their bid is a more attractive offer for UFJ shareholders.

In its merger proposal to UFJ, Sumitomo Mitsui has offered a one-for-one stock exchange, which puts a big premium on UFJ shares. It extended a deadline for a reply from late last month to June next year.

Separately, financial authorities announced Thursday they had filed a criminal complaint against UFJ's banking unit and three top executives for allegedly obstructing regulatory inspections. Financial Services Agency official Ko Sato said the complaint had been sent to the Tokyo District Prosecutors' Office.

The filing was an embarrassing blow to UFJ, which recently had been ordered to improve its operations after the bank admitted its staff had tried to conceal documents showing that borrowers were in worse shape than the bank's reports to the government had let on.

UFJ, which is losing money and is struggling with a list of troubled borrowers, has been seeking a merger to stay in business as a bank.

Last month, UFJ accepted a 700 billion yen ($6.3 billion) cash infusion from Mitsubishi Tokyo that includes a condition making it harder for an outside suitor to step in, although it doesn't rule it out entirely if a rival is able to convince UFJ shareholders.

The unfolding battle over UFJ is unprecedented here because Japan's banking has long been orchestrated by the government during the decades of the nation's modernization after its defeat in World War II.

Mergers among banks surfaced only recently amid a long slowdown in the world's second largest economy that burdened many Japanese banks with bad debts.

UFJ, Sumitomo Mitsui and Mitsubishi Tokyo are among Japan's "Big Four" financial groups. All four were formed in recent years by mergers of smaller banks.

(TOPS with two grafs to correct that UFJ is smaller sted larger than Sumitomo)