Richard Fuld's days as Lehman Brothers chief are numbered as a plan is being hatched within the troubled Wall Street investment bank to strip him of his executive duties.
The planned coup comes amid rumours a Korean investor is planning either a sizeable investment in Lehmans or an outright acquisition of the firm.
Shares in Lehman Brothers, which have lost more than 80 per cent of their value this year because of the bank's disastrous foray into the sub-prime mortgage business, surged 12 per cent at one point on Friday as talk of an imminent acquisition gripped the market.
All it took was a seemingly innocuous comment from a spokesman at the Korean Development Bank in Seoul who said the company is 'considering all kinds of options, including Lehman'.
KDB later played down the likelihood that it is ready to swoop in on Lehman. "We are just at an early stage of privatization, and we are weak at investment banking by international standards," bank spokesman Sung Joo-yung said in an interview with The Wall Street Journal. "In the long term, we should strengthen that weakness."
...KDB's new chairman, Min Euoo-song, is a former chief of Lehman's Seoul branch and has a reputation in Korean banking as an aggressive deal maker. But to make a takeover or sizable investment in Lehman work, Mr. Min would have to persuade South Korean regulators that Lehman fits with the government's plan to privatize KDB.