PRESS DIGEST - South Korean newspapers - Sept 17

SEOUL, Sept 17 (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.

MAEIL BUSINESS NEWSPAPER

Financial fears from Wall Street hit South Korean markets on Tuesday, with the benchmark KOSPI down 6 percent and the South Korean won closing at 1,160 per dollar, its biggest daily loss in more than 10 years.

Lehman Brothers LEH.N has invested more than 1 trillion won ($863.3 million) in South Korea, according to the Financial Supervisory Service.

The National Pension Service (NPS), the world's fifth-largest pension fund, has pumped $722 million into U.S.-based Lehman Brothers, Merrill Lynch and AIG, a Grand National Party lawmaker said after reviewing NPS reports.

JOONGANG ILBO

The U.S. government has awarded permanent residency to a North Korean defector for the first time, her lawyer announced. She fled North Korea two years ago and now lives in Virginia.

Hwang Jang-yop, a former high-ranking North Korean official who escaped to the South in 1997, said that eldest son Kim Jong-nam was highly likely to become Kim Jong-Il's successor after his death and that the Korea Workers' Party may seize power rather than the military.

South Korean civilian groups are pursuing large-scale visits to North Korea this year, according to the Unification Ministry. There were no particular obstacles in talks on the visits, said an official from one of the groups planning to call on North Korea from Sept 27.

KOREA ECONOMIC DAILY

Hynix Semiconductor Inc (000660.KS) is set to terminate production of 8-inch silicon wafers in attempt to maximise production efficiency, a Hynix official said.

South Korean citizens will be able to make donations to politicians or the National Election Commission (NEC) via their cellphones in a bid to promote small political aid contributions, the NEC said.

CHOSUN ILBO

Applicants for the Test of Proficiency in Korean more than doubled in 2008 compared to the previous year, according to the Education Ministry.