PRESS DIGEST - South Korean newspapers - July 1

SEOUL, July 1 (Reuters) - The following is a summary of major South Korean newspapers on Wednesday, prepared by Reuters in Seoul. Reuters has not checked the stories and does not guarantee their accuracy.

CHOSUN ILBO

North Korea is known to have sold about $800 million weapons since 2000 to countries including Iran and Syria through landways in China and Russia, to avoid the proliferation security initiative (PSI), a South Korean government source said.

KOREA ECONOMIC DAILY

The Kumho Group is contacting one or two potential candidates to buy Daewoo Engineering & Construction (047040.KS). The candidates were not named but were said to be a conglomerate and a private equity fund, a Kumho Group official said.

The South Korean unit of Standard Chartered (STAN.L) (2888.HK) said it had launched a financial holdings firm in South Korea on Tuesday, the first foreign financial company to set up a holding company.

Insurer Ergo International (ERGG.DE), part of German-based Munich Re (MUVGn.DE), is closely watching South Korean life insurance firms for a potential takeover, Ergo's management chairman Jochen Messemer said on Tuesday during his visit to Seoul.

DONG-A ILBO

South Korea's parliamentary have failed to reach an agreement for a labour law that could allow more flexible employment for contract workers. The government estimated some 20,000 to 30,000 temporary workers in the country could face job losses in July under the current law, which allows firms to hire contractors for up to two years.