NEW YORK, Jan 22 (Reuters) - Sun Hung Kai Financial (0086.HK), one of Hong Kong's largest non-bank financial institutions, said on Thursday it will repurchase up to HK$85 million of Lehman Brothers Holdings Inc (LEHMQ.PK) mini bonds from its primary market retail customers.

The repurchase offers will be made at the full principal value of the Lehman Brothers mini bonds -- notes secured by swap obligations guaranteed by Lehman -- held by the Sun Hung Kai's 310 primary market retail customers, it said.

Sun Hung Kai said it fully cooperated with the Securities & Futures Commission and did not admit to any liability or wrongdoing.

Some Hong Kong investors had called for government action after losing money on structured products linked to Lehman Brothers, which went bankrupt in September.

In a protest in September, Hong Kong investors, many of them elderly retirees, accused the government of failing to provide proper oversight and said local banks did not do enough to warn them of the risks.

An advertisement issued by a unit of Sun Hung Kai & Co Ltd touted the product as "a strong collection letting you invest with peace of mind," while noting in fine print that the notes involved "a high degree of risk."

Sun Hung Kai said it explored various options in recent months and worked with various relevant parties before deciding to voluntarily repurchase the mini bonds.

"We believe that this voluntary initiative will bring closure to our affected customers, particularly in light of this challenging economic environment," Executive Chairman Lee Seng Huang said in a statement.

Sun Hung Kai, which has more than HK$50 billion in assets under management, said the repurchase will not affect its expansion plans. ($1=HK$7.75) (Reporting by Paritosh Bansal; Editing by Andre Grenon)