SKorea bank mum on Lehman

September 1, 2008
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, SEOUL, September 1 – South Korea\’s state-run Korea Development Bank refused comment Monday on a British newspaper report that it is still seeking a stake in troubled US investment bank Lehman Brothers.

The Sunday Telegraph said Lehman is close to raising as much as six billion dollars from KDB in exchange for a stake.

Lehman hopes to conclude talks with KDB this week but is also working on alternative plans with Chinese brokerage Citic Securities or sovereign wealth funds from Abu Dhabi and Qatar, the newspaper said

South Korea\’s Financial Services Commission said KDB has not submitted a plan to it about buying a stake in a global bank.

"We are aware that KDB is reviewing a plan to invest in a global investment bank, but nothing has been decided," commission vice chairman Rhee Chang-Yong told Dow Jones Newswires.

He said KDB, set up in 1954 to finance the nation\’s industrial and economic development, was considering a possible investment in Lehman Brothers as well as other global banks.

"If there is a decision made by KDB, it will have to seek regulatory approval on any large investment. But the government can\’t grant approval in just a day or two," said Rhee.

Lehman Brothers suffered billions of dollars in writedowns and credit losses in the financial crisis triggered by the meltdown in the US subprime mortgage sector.

A local newspaper reported last month that South Korean banks led by KDB had shelved plans to buy a stake and management rights in Lehman due to concerns about its financial health.

But the Chosun Ilbo newspaper said the bid may be resurrected.

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