South Korea in talks with Lehman

After weeks of speculation and rumour, South Korea has confirmed that it is interested in beleaguered US investment bank Lehman Brothers.

A spokesman for state-run Korea Development Bank (KDB) said it was in talks about a possible investment.

A report by Korea's Yonhap news agency said the bank was seeking to buy Lehman outright as part of a consortium.

Lehman has sustained billions of dollars in writedowns because of investments hit by the credit crisis.

The Sunday Telegraph reported at the weekend that Lehman hopes to raise $6bn from KDB although it is also working on alternative plans with financial institutions from China, Abu Dhabi and Qatar.

KDB chief Min Euoo-Sung told South Korea's Yonhap news agency there were differences over pricing and the US firm's potential liabilities.

"I think it is desirable to make a joint bid for Lehman Brothers. So (KDB) is in talks with other commercial banks on forming a consortium," he was quoted as saying.

However, he added that "it is difficult to predict the outcome of negotiations with Lehman due to differences over price".

A spokesman for KDB confirmed that the bank was in talks over a potential investment but could not disclose the details.

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