State-owned Korea Development Bank (KDB) declined to comment Wednesday on media reports that it had ended talks with Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) on a possible investment in the troubled U.S. lender.
The Maeil Business Newspaper reported in its Wednesday edition that the talks had ended, quoting a "high ranking government official."
"Given the domestic financial environment, the circumstances around KDB (and) the price of the stake, we can say that talks between KDB and Lehman are unlikely to succeed and that they have collapsed," the unnamed official was quoted as saying.
KDB [KDB.UL] spokesman Sung Joo-young declined to comment on the reports.
Last week Sung confirmed KDB was in talks with the subprime-hit U.S. bank on a 25 percent stake that could cost KDB up to $5.3 billion, according to reports [ID:nSP115462].
Other reports on Tuesday quoted Jun Kwang-woo, the chairman of the Financial Services Commission (FSC), as also saying the talks between KDB and Lehman had ended, but they were dismissed by the regulator.
"Our chairman has never said such things," FSC spokesman Yoo Jae-hoon told Reuters.
Lehman shares sank 45 percent on Tuesday on growing concern the fourth-largest Wall Street investment bank would be unable to raise sufficient capital to survive the global credit crisis.
The stock closed down $6.36 at $7.79 on the New York Stock Exchange, touching its lowest level since October 1998. The slide wiped out $4.4 billion in market value and prompted a broad decline in major U.S. stock indexes.
