Lehman's Korean Suitor Cautioned

Lehman's Korean Suitor Cautioned

SEOUL (Reuters) - A top regulator on Monday voiced concern about state-run Korea Development Bank's (KDB) interest in buying a global bank, saying it should be just a "cheerleader" and let local private banks take the lead in any such purchase.

KDB said on Friday it was open to the acquisition of an overseas financial institution, naming Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research, Stock Buzz) as one of its options. The comments sent Lehman's share price up 12 percent on the day.

"I think that KDB might have considered forming and leading a consortium (to buy Lehman Brothers)," Financial Services Commission (FSC) Chairman Jun Kwang-woo told reporters.

"But it appears burdensome for a state-run institution to play a leading role (in the purchase of a foreign company) and take risks which may be more than financial."

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