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Sunday, May 18, 2008

Navy Alert Over Sale of Daewoo Shipbuilding

Korea Development Bank (KDB), the largest shareholder of Daewoo Shipbuilding & Marine Engineering, has nullified its decision to choose Goldman Sachs as the lead manager for the sale of the shipbuilder amid rumors that military intelligence officials will intervene in the sale in view of its consequences for national security.

Daewoo has supplied submarines, destroyers and other types of vessels to Korea's Navy since 1989. KDB put the firm up for sale and announced last month that it had selected Goldman Sachs as the lead manager.

Defense officials have voiced concerns about possible military technology leakage, citing Goldman's recent investment in a Chinese shipbuilder. GS Phereclus Holdings, a wholly owned unit of Goldman Sachs, has agreed to pay $50 million in cash for a 20 percent stake in Yangfan Group, a mid-sized shipbuilder based in Zhejiang Province, after year-long negotiations.

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