TCRAP_Public/000426.MBX   T R O U B L E D   C O M P A N Y   R E P O R T E R

                           A S I A   P A C I F I C

         Wednesday, April 26, 2000, Vol. 3, No. 81


* A U S T R A L I A *

BHP STEEL: Smorgon Email bid may stifle BHP plan
CALTEX AUSTRALIA LTD: Kurnell Refinery to close; strike
SPORTSGIRL-SPORTSCRAFT GROUP: Fighting over the scraps

* C H I N A  &  H O N G  K O N G *

AGRICUL.BANK OF CHINA: Considers listing to pay debt
BANK OF CHINA: Considers listing to pay debt
CHINA CONSTRUC.BANK: Considers listing to pay debt
INDUS.& COMM'L BANK OF CHINA: Considers listing to pay debt

* I N D O N E S I A *

A.LATIEF CORP.: IBRA asks 1-day court delay for payment
MARAUW HOTEL: Casino proposed to revive it, region
PT BANK DANAMON INDONESIA: Merger as part of restructuring

* J A P A N *

DAIEI OMC INC.: Books 59.8B Yen net loss for FY99
DAIEI INC.: Unveils sell-off in bid to cut group debt
DAIKYO INC.: Books 10B Yen special loss
SAKURA BANK: To raise bad-loan provisions
SKYMARK AIRLINES CO.: To abolish two domestic routes
SOGO CO.: `Too big to let go under' it argues
SUMITOMO BANK: To raise bad-loan provisions
TAKA-Q CO.: Continues losing streak in FY99

* K O R E A *

KOREA DEVELOP.BANK: To become financial holding co.?
SAMSUNG MOTORS: Creditor vote on Renault deal
SEOUL BANK: Deutsche Bank takeover not ruled out

* M A L A Y S I A *

DIVERSIFIED RESOURCES: Places subsidiary with CDRC
DIVERSIFIED RESOURCES: Briefs investors on restructuring

* P H I L I P P I N E S *

FAIRGROUP: Open to talks with foreign investors
PHILIPPINE NAT.BANK : Gov't-L.Tan joint sale today
VICTORIAS MILLING CORP.: Keeps 'high' trucking allowance
WESMONT INVEST.CORP.: 2nd investor group to sue for fraud

* T H A I L A N D *

BANGKOK BANK: Major banks post Bt13B Q1 total loss
BANGKOK BANK: Hastening bad-debt restructuring
BANGKOK METRO.BANK: Major banks post Bt13B Q1 total loss
BANK OF AYUDHYA: Major banks post Bt13B Q1 total loss
DBS THAI DANU BANK: Hastening bad-debt restructuring
PADAENG INDUS.: Investor negotiations delayed
SIAM CITY BANK: Hastening bad-debt restructuring
SIAM COMMERCIAL BANK: Hastening bad-debt restructuring
THAI PETROCHEMICAL BANK: Hastening bad-debt restructuring
THAI PETROCHEM.INDUS.: Prachai says `no hard feelings'


BHP STEEL: Smorgon Email bid may stifle BHP plan
A $785 million hostile takeover bid for Email could derail
BHP Steel's long-products spin-off later this year as
Smorgon pursues an aggressive path of wresting control of
key parts of Australia's steel industry.

Broking analysts say the Email takeover is both positive
and negative for BHP Steel, which plans to list its $1
billion long-products division at the end of the year.
A spokesman for BHP Steel declined to comment on BHP's
reaction to the bid or whether it would launch a rival bid.

There are three major steel-distribution businesses in
Australia - Smorgon's Steelmark Globe and Eagle, Email's
Union Steel, and BHP's Tubemakers Merchandising. Email's
Union Steel distribution business is a major customer of
BHP's. To have Email's Union Steel distribution business
come under the control of Smorgon could marginalise BHP.

Email distributes BHP's Tubemakers Structural Products in
particular and could instead revert to Smorgon's Palmer
Tube Mills. While it remains possible that BHP could
counter-bid for Email, it is expected to be reluctant to
pour more capital into a business it is hiving off.

One analyst said it was unlikely Union Steel would only
distribute Smorgon products because Smorgon was unlikely to
have the capacity to supply the business on its own.
BHP still produces close to 70 per cent of Australia's 4.8
million tonnes of steel a year, a large proportion
of which is delivered directly to customers such as major

But with the recent acquisition of Metalcorp and its small
distribution business, the combined Union Steel/Steelmark
operation would control more than 50 per cent of the steel-
distribution market and perhaps as much as 60per cent.
Tubemakers' share is estimated at about one-third and the
balance is made up of smaller independent players.

The positives cited for BHP are that a merger of Smorgon
and Email's distribution businesses could see them lose
some market share during the integration, while steel
prices might also improve if Union Steel reduces the amount
of steel products it imports.  Smorgon is offering $1.85
cash plus a converting preference share in a listed company
housing the appliance division for every Email share, but
the Email board has rejected it as too low.

Email shares rose 6.5 cents on Thursday to $2.82, though
some analysts value Email at up to $3.30.  The acquisition
is also seen as offering Smorgon an opportunity to further
expand its product range into flat products, the business
that is being retained by BHP.  (The Age 24-April-2000)

CALTEX AUSTRALIA LTD: Kurnell Refinery to close; strike
Caltex Australia Limited said today the company was very
disappointed strike action will go ahead at its Kurnell
refinery following a decision by the Australian Industrial
Relations Commission to adjourn a hearing on the dispute
between the company and the refinery plant operators. The
refinery is now being progressively shut down in a series
of steps that will be completed on Sunday morning.

"Caltex very much regrets that there will be a shortage of
fuel supplies in NSW as a result of the strike by its
refinery operators on Sunday," said Kurnell Refineries
Manager Chris Hogarth." (Sydney Morning Herald  20-April-

SPORTSGIRL-SPORTSCRAFT GROUP: Fighting over the scraps
A delicate game of brinkmanship between the former owner of
the Sportsgirl fashion chain, South Africa's Truworth
group, and small Sportsgirl creditors will climax this

John Spark and James Stewart of Ferrier Hodgson were
appointed administrators of Sportsgirl-Sportscraft in
November last year.  They sold the operational spine of the
business, the Sportsgirl chain in Australia, to Marc
Besen's Sussan Corp before Christmas and disposed of other
bits and pieces in the new year.

Then, earlier this month, they went to creditors with an
offer from Truworth that would, if accepted, deal the South
African company out of its disastrous investment.  The
South African group raised loan funds that were passed down
to the Australian clothing chain, and is by far the largest
creditor, with a $74.9 million claim. Trade creditors are
owed between $13.2 million and $13.4 million, and possible
claims by landlords of Sportsgirl premises take the total
creditors' claims to between $97.2 million and $98.7

This month Spark and Stewart proposed that creditors accept
a deed of arrangement in which Truworth gives up half of
its creditor's claim over Sportsgirl and the rest of the
creditors agree not to take legal action over the clothing
group's collapse.

Practically, Truworth would redirect about $4.5 million to
Sportsgirl's small creditors in return for legal immunity
over Sportsgirl's crash. The "payment" would be spread
among other creditors, boosting the potential pay-out from
between 10c and 13.9c in the dollar to between 26.7c and
38.8c in the dollar.

The deal is to be considered at a creditors' meeting on
Wednesday this week and has to be approved by a simple
majority of creditors by number, plus a simple majority by

Sources say that at a meeting of a committee of creditors
earlier this month, well over half of those present opposed
the deal.  Now a group of about six major trade creditors
has coalesced behind Melbourne insolvency practitioner Paul
Pattison against the deal. These creditors are owed about
$8 million, more than half the total owed by Sportsgirl to
trade suppliers, and are understood to include the HIH and
QBE insurance groups, Pacific Dunlop and a Melbourne
garment manufacture, Shawnn Enterprises. The law firm of
Holding Redlich has provided advice.

The proposal will probably be approved at Wednesday's
meeting. The dollar vote will be decided by Truworth, which
has three quarters of the total creditor exposure, and will
obviously vote yes.  Truworth representatives are also
reported to be actively canvassing Sportsgirl's 700
creditors for enough support to guarantee that a majority
of creditors vote in favour. If that campaign fails, the
casting vote rests with Ferrier Hodgson, which is strongly
supportive of the plan.

However, it is understood that at meetings held after last
week's public announcement of the proposal, Pattison's
group confirmed its determination to oppose the trade-off
and to launch legal action if the scheme is adopted.

In the action they intend to claim that they were an
oppressed minority, and ask (in order) for Truworth's right
to vote at the meeting to be set aside, the deed of
settlement extinguished, a liquidator appointed, and legal
action commenced by the liquidator alleging that Sportsgirl
traded last year while it was insolvent.

On face value, that is a risky course to take.  Spark and
Stewart say in their latest report that, on the basis of
their investigations, a liquidator may (their emphasis) be
able to show that Sportsgirl was insolvent from September
last year. The group ran up debts totalling $10.4 million
between September 30 and its move into administration in
November and a successful action against directors and/or
the South African parent would seek payment of that amount
into the creditors' pool, to push the total return up to
about 50c in the dollar. Payment could be funded out of
directors' liability insurance.

But the administrators also note that establishing
Sportsgirl was insolvent at that time would not prove the
insolvency claim: substantial, expensive investigation
would have to be undertaken to discover whether Sportsgirl
was in fact allowed (my emphasis) to trade while insolvent.

And Sportsgirl's decline last year was no simple matter.
The group's main banker, National Australia Bank, demanded
repayment of its facilities in May as trading conditions
deteriorated but Standard Chartered in London provided a
new facility in June.

Subsequent attempts to refinance the group were
inconclusive but Sportsgirl's directors claim that the
company at all times had the financial backing of its
parent, Truworth. If that is correct, "the directors are
likely to have a complete defence to any insolvent trading
claim", Spark and Stewart say.

The logic behind a series of adjustments to Sportsgirl's
books at June 30 last year after a report by Ernst & Young
criticised Sportsgirl's accounting system would also have
to be examined.

Sportsgirl is understood to have changed the way it booked
shrinkage (the retailing euphemism for shoplifting), unused
gift vouchers, import consignments and other items.
Inventories were reduced by about $3.5 million as a result
of the changes, which in their entirety generated an extra
$6 million in losses, pushing the clothing house to a $12.9
million deficit in 1998-99.

The executives who ran the old book-keeping system and
those responsible for the mid-1999 accounting rejig
disagree totally about whether the changes were justified.
Spark and Stewart say they cannot judge which side is right
and estimate that it would cost up to $7 million to
investigate the circumstances surrounding Sportsgirl's fall
and run a court action that could take up to eight years to

In the absence of a court order to the contrary, Truworth
would be entitled to three-quarters of any extra payments
generated by the legal action, they add.  Last week John
Spark said creditors had "a very clear choice," that is,

The creditors that have hired Paul Pattison so far see it
differently and believe more than $100 million of tax
losses inside Sportsgirl gives them leverage over the South
African group.

Debt forgiveness provisions in the tax act would reduce the
tax losses to about $80 million if the deed of arrangement
was approved. The losses are worth about $29 million if
they can be burnt against earnings and the smaller
creditors believe a vehicle exists - the once-again
profitable Country Road, the upmarket clothing and home-
products chain taken over by Woolworths of South Africa in
1997. Truworth and Woolworths operate separately but have
the same parent company: Wooltru.

The administrators say the other members of the South
African group cannot use the tax losses, because the
holding company for Sportsgirl was only owned 90 per cent
by Truworth. A former managing director of Sportsgirl,
Frank Whitford, held the remaining 10 per cent.  The small
creditors group believes, however, the losses may be
accessible to Wooltru-Truworth-Woolworths. (Sydney Morning
Herald  24-April-2000)

C H I N A  &  H O N G  K O N G

AGRICUL.BANK OF CHINA: Considers listing to pay debt
BANK OF CHINA: Considers listing to pay debt
CHINA CONSTRUC.BANK: Considers listing to pay debt
INDUS.& COMM'L BANK OF CHINA: Considers listing to pay debt
The mainland's four major state-owned banks are eyeing
share offerings to raise capital and boost competitiveness
before the mainland's World Trade Organisation entry,
according to a report.

Officials at the debt-laden Bank of China, Agricultural
Bank of China, Industrial and Commercial Bank of China and
China Construction Bank said the capital market should not
be excluded as a way to strengthen management and financial
standing, the China Daily Business Weekly yesterday said.

"We should be permitted to raise funds via various
financial instruments, such as by issuing shares or
convertible bonds," Liu Mingkang, Bank of China president,
was quoted as saying.

Fang Xinghai, general manager of Construction Bank's group
co-ordination committee, was more blunt and suggested one
bank be listed first as an experiment.

"I see no better way than listing the banks on the stock
market to improve the banks' corporate governance," the
newspaper quoted Mr Fang as saying.  "We do not need to
push all four on to the market in one blow. We can first
list one of them for an experiment," he said, noting other
sectors had conducted similar listing experiments while

The newspaper gave no timetable or details on possible
share offers.  But it said the central People's Bank of
China appeared to have no immediate plans to push the big
four into going public, partly due to a long-held view that
the major banks should remain completely in state control.

A central bank official said he had not heard of any
listing plan. The mainland expects to join the WTO this
year. Banks have been scrambling to prepare for competition
from foreign banks that are stronger and offer more

Under a Sino-US pact signed in November, the mainland will
allow foreign banks to do yuan currency business with
mainland firms two years after WTO entry and retail
business after five years. Earlier this year, central bank
governor Dai Xianglong said there would be no policy
obstacles for turning the big state banks into
"shareholding entities".

But reforms were needed first, and the banks must first get
bad loans off their books and slash bloated payrolls among
other things, he said. The mainland has so far allowed the
listings by only two smaller state banks - Shanghai Pudong
Development Bank and Shenzhen Development Bank.

China Everbright, the China Bank of Communications, and
Minsheng Bank have said they plan to offer shares to the
public. (South China Morning Post  24-April-2000)


A.LATIEF CORP.: IBRA asks 1-day court delay for payment
The Indonesian Bank Restructuring Agency (IBRA) has
requested the Jakarta Commercial Court to postpone today's
hearing against ALatief Corporation until tomorrow, pending
the company's fulfillment of a promise to repay a 16 mln
usd debt to the agency.

"IBRA will wait until this afternoon. If ALatief pays the
debt, we will cancel the litigation and settle the case
outside the court," IBRA lawyer Tantawi Nasution said.
(AFX News Limited  24-April-2000)

MARAUW HOTEL: Casino proposed to revive it, region
A company set up by American, Australian, British and
Indonesian businessmen has proposed to open a US$ 200
million casino in Biak Numfor, in a bid to lure tourists
to come to this district of Irian Jaya.

Chairman of the provincial legislative assembly's
Commission B, Paulus Sumino, said here Wednesday that the
company, Karebs Krisniani Berkati, has submitted a proposal
to open a casino in five-star Marauw Hotel in Biak Numfor.

Paulus expressed hope that the casino would help revive
tourism in the district, which has been hit by low hotel
occupancy rate since the onset of the economic crisis.
Marauw Hotel is on the verge of bankruptcy and the local
administration has allocated Rp 500 million to help it
repay Rp 2 billion in credit from Bank Mandiri.

"If Biak has a casino, its tourism industry in general and
Marauw Hotel in particular will hopefully be revived," he
said, adding that Biak has many interesting tourist spots,
such as the underwater park in Cendrawasih Bay. "The
proposal to open a casino should be accepted or the company
will build the gambling facility in Hawaii."

Four factions of the provincial legislative assembly --
Golkar, Indonesian Democratic Party-Struggle, Indonesian
Democratic Party, and the Democracy and Love the Nation
Party -- have signaled their approval to build a casino in
Marauw Hotel. (World Reporter  19-April-2000)

PT BANK DANAMON INDONESIA: Merger as part of restructuring
PT Bank Danamon Indonesia is one of 8 banks to be merged
into DBI. The remaining 7 participating banks are PT Bank
Duta Tbk, PT Bank Nusa Nasional Tbk, PT Bank Pos Nusantara,
PT Bank Rama Tbk, PT JayaBank International, PT Bank
Risjad Salim International and PT Bank Tamara Tbk.

All 8 banks to be merged into BDI will undergo a
recapitalisation programme prior to the proposed merger.
Under the recapitalisation programme, all Category 5 loans
that have not been transferred to The Indonesian Banking
Restructuring Agency's ("IBRA") Asset Management Credit
division ("AMC") will be transferred to the AMC after full
provision. Non-loan assets not transferred to BDI will be
transferred to the IBRA after full provision. Category 1 to
4 loans will be transferred by law to BDI on the effective
date of the merger.

Part of the Company's employees might be retrenched and
some of the Company's branches might be closed. As a result
of the merger, the Company will be dissolved by law without
prior liquidation.

One share Series A and Series B in the Company can be
converted into 0.83 share Series B in the capital of BDI.
The proposed merger is subject to approval from all the
relevant shareholders, authorities and related parties. The
merger is expected to be effective on 31-May-2000. (Extel
Company News  17-April-2000)


DAIEI OMC INC.: Books 59.8B Yen net loss for FY99
Daiei OMC Inc. (8258) reported on Thursday a 59.8 billion
yen net loss for the fiscal year ended Feb. 29, turning
around from a 212 million yen profit the year before.

Its mainline credit card business was sound, but the
company took an extraordinary loss of 119.2 billion yen to
dispose of trade credit that had turned sour.  Revenue went
up 3% to 99.1 billion yen as the number of cardholders rose
by 300,000 to 6.03 million. Total transaction volume grew
6% to 1.42 trillion yen.

Disposing of bad credit extended to businesses helped
reduce related costs by 9.3 billion yen, and pretax profit
jumped 150% to 20 billion yen.  The company offset part of
the extraordinary loss with an 8.4 billion yen
extraordinary gain, largely from the sale of Recruit Co.
shares. Its switch to the deferred-tax accounting system
also resulted in a 42.9 billion yen tax carryback.

Daiei OMC said it would focus on consumer business this
fiscal year, and plans to post a 14.5 billion yen net
profit for the term. Revenue is projected to rise 4% to 103
billion yen, while pretax profit will grow 25% to 25
billion yen. The number of cardholders is seen rising by
400,000, and total transaction volume by 6%.  (Nikkei  21-

DAIEI INC.: Unveils sell-off in bid to cut group debt
Leading supermarket chain operator Daiei has unveiled a
restructuring plan aimed at trimming group debt piled up
from an expansion drive in the 1990s.

Under a new three-year scheme, the operator of more than
300 outlets said it hoped to cut group interest-bearing
debt by 500 billion yen (about HK$36.91 billion) to 1.7
trillion yen by the end of next February.  To achieve the
goal, Daiei plans to raise funds by selling part of its
operations and assets, and by listing Lawson, a convenience
store chain operator in which it owns 67 per cent.

News of the debt-cutting target came after the Tokyo stock
market had closed. Daiei's shares ended up 12 yen or 3.6
per cent at 343. The stock has been in a recent downtrend,
hitting a year's low of 315 on Monday.  Daiei president
Tadasu Toba said Lawson planned to list on the Tokyo Stock
Exchange by the end of July, bringing Daiei an estimated
461 billion yen.

The retailer said it would trim its stake in Lawson to
about 30 to 40 per cent to generate funds of 400 to 600
billion yen to cut its interest-bearing debt. It has sold a
20 per cent steak in Lawson to trading house Mitsubishi in
the form of bonds that can be swapped with Lawson shares
upon its listing.

Daiei said it was considering more initial public offerings
of Daiei group firms - Daiei Olympic Sport Club in 2001-
2002, and department store Printemps Ginza and steak
restaurant chain Big Boy Japan in 2002-2003.  Daiei also
said it was aiming to liquidate about 50 money-losing
affiliates. By cutting the number of group firms to 162 by
next February, it hopes to ensure all its group firms stay

It is also eyeing job cuts, but mainly by transferring them
to group firms.  Daiei said its parent-based interest-
bearing debt rose to 660.6 billion yen as of February 29,
from 655.7 billion yen a year earlier.  Daiei yesterday
posted a group net loss of 21.94 billion yen for 1999-2000,
against a net loss of 41.29 billion yen a year ago. Group
net profit for 2000-2001 is estimated at 90 billion yen,
due to extraordinary profit from sales of Lawson shares.
(South China Morning Post  22-April-2000)

DAIKYO INC.: Books 10B Yen special loss
Daikyo Inc. (8840) recorded a 10 billion yen extraordinary
loss in the fiscal year ended March due to falling prices
on real estate bought for resale, company sources said. The
condominium builder intends to bring forward the
introduction of market-price accounting and fortify its
financial position.

The figure represents the firm's losses on all property for
resale that went down in price by at least half since
purchase. The book value of the properties amounts to some
18 billion yen.

Although pretax profit apparently climbed 80% from fiscal
1998 to 11 billion yen, the extraordinary loss contributed
to a 60% decline in net profit, which came in at 1 billion
yen. Pretax results under Japanese accounting practices are
calculated before deducting extraordinary items and taxes.

Daikyo had forecast 12 billion yen in pretax profit and 5
billion yen in net profit.  The company also booked
extraordinary losses from supporting an affiliate and
devalued stockholdings.  Fiscal 1999 sales slipped some 14%
from a year earlier to about 360 billion yen. The company
sold only around 10,000 condos, a decline of 1,000,
although contracts to build new ones were up 30%.  (Nikkei

SAKURA BANK: To raise bad-loan provisions
SUMITOMO BANK: To raise bad-loan provisions
Sumitomo and Sakura, the Japanese banks, have doubled their
provisions for bad loans in a move likely to heighten
concerns that Japan's banking sector is taking longer than
expected to restructure its enormous loan burden.

The two banks said they expected to write off Y1,110bn
($10.3bn) of bad loans for the 1999 financial year, twice
as much as they had projected six months ago. The banks did
not provide any detailed explanation of why they had raised
their projections.

Japan's big banks have already written off around Y50,000bn
of bad loans in the current round of restructuring and
claim that they have dealt with the problem.  However, some
analysts fear the banks have still not fully provisioned
for potential bankruptcies in troubled sectors such as
construction and retailing.

"We believe it is too early to say that the banks' asset
quality problems are over," said James Fiorillo, banking
analyst at ING Barings.

Other Japanese banks are not expected to release data on
their bad loan provisions until next month.  Sumitomo and
Sakura provided the details as they announced that they
planned to merge the two banks at a ratio of 0.6 Sumitomo
shares for each Sakura share.  They said they had brought
forward the target date for their merger to next year due
to the rapid consolidation of other Japanese banks.

Analysts say the slow progress of consolidation threatens
to undermine the greater profitability the banks are
seeking from the merger process.  A series of banking
mergers has been announced in the past year, including
those of Industrial Bank of Japan, Fuji and Dai-Ichi
Kangyo, of Tokai, Asahi and Sanwa and, most recently, of
Bank of Tokyo Mitsubishi and Mitsubishi Trust.

However, most of these mergers are taking almost two years
to complete, triggering intense internal wrangles.
(Financial Times  23-April-2000)

SKYMARK AIRLINES CO.: To abolish two domestic routes
Skymark Airlines Co., a relatively new discount carrier,
has decided to abolish unprofitable flights between Osaka
and Sapporo and Osaka and Fukuoka by early July, company
sources said. The struggling airline has failed to fill an
average 50% of available seats for the routes, below the
break-even level.

Skymark started two daily Osaka-Sapporo flights and one
Osaka-Fukuoka service in April 1999, but it has failed to
attract group-bookings, which are a cash cow for carriers.

The airline will concentrate on the profitable Tokyo-
Fukuoka route, increasing the number of flights from three
to six a day as additional arrival and departure slots at
Tokyo's Haneda airport come available from July. With a
fleet of only two planes, Skymark is unable to operate
flights on other routes, although it plans an international
charter flight service from next spring or later.

Three major airlines, Japan Air System Co. (9203), All
Nippon Airways Co. (9202) and Japan Airlines Co. (9201),
will increase the number of Tokyo-Osaka flights from July,
using three slots at Osaka's Itami airport vacated by
Skymark. (Nikkei  24-April-2000)

SOGO CO.: `Too big to let go under' it argues
A giant corporation in trouble is sometimes described as
"too big to let go under." The ailing business group
centering on Sogo Co. has cited this argument in asking the
banks it deals with to forgive 639 billion yen ($6.1
billion) in loans for its survival.

Speaking at a news conference, executives of the department
store emphasized that they had decided on the move because
the alternative-letting the group go into bankruptcy-would
have an enormous impact on the nation's economic society.

"We have 50,000 people on our payroll, including part-time
workers, and we do business with 10,000 companies," one
executive said.

Relinquishing massive amounts of debt may initially seem a
plausible way to help reconstruction efforts. Actually, the
proposed formula raises a number of questions.  The Sogo
group's composition is peculiar. It has 27 Sogo stores
operating across the country, but only three of them belong
to the entity listed as Sogo Co. on the stock exchange.
Chiba Sogo, owned by Hiroo Mizushima, the company's
chairman, functions as a holding company for the remaining
unlisted stores.

The many unlisted stores reflect the result of an expansion
policy pursued to profit from a land price inflation. This
policy backfired, but the reality of the losses sustained
by the group's stores has not been made public. The
Industrial Bank of Japan, the group's principal credit
supplier, has failed to press demands that it restructure
itself in a fundamental way.

This state of affairs might have resulted from the
backscratching relationship that has existed between
Mizushima, a former IBJ official, and the bank. The group
might not have come up with such reconstruction measures
without the approaching days of strict accounting,
including full enforcement of legal requirements for
companies and their subsidiaries to combine their financial

Mindful of this, the audit firm hired by the Sogo group
pressed it to be strict in preparing its financial
statement. Driven into a corner, the group quickly mapped
out the reconstruction measures.  The trouble with the
measures is that Sogo executives have escaped
responsibility for leaving the group's financial woes
unaddressed to protect employees and the companies it does
business with.

The group's proposal to pay back 350 billion yen in debt on
its own over a period of 12 years seems to be unrealistic,
given the low profit rates afflicting its stores and the
stagnant consumer demand.  The request to give up loans,
the key component of the reconstruction package, was made
to 73 financial institutions.

It would have been odd if it had not provoked voices of
dissatisfaction from institutions other than the IBJ. Ready
compliance would touch off hostile reaction from
shareholders and other borrowers.  The failed Nippon Credit
Bank, now temporarily nationalized, was asked to write off
8 billion yen. But Sadakazu Tanigaki, chairman of the
Financial Reconstruction Commission, spurned the request as

The Sogo group's move poses a more serious problem with the
Long-Term Credit Bank of Japan, which stands next to the
IBJ as a lender, with 97 billion yen outstanding. This bank
has made a post-bankruptcy restart on the strength of a
massive infusion of tax money. It can ask the government
for more if the value of its loans drops by more than 20

The idea of counting on another infusion of tax money to
make up for the loss of 97 billion yen cannot possibly
materialize.  Corporate bailouts through the write-offs
have become a conspicuous feature of the construction and
distribution industries in the past few years. It is a
phenomenon prodded by falling land prices and the approach
of full enforcement of the combined financial statement
rule. Large-scale write-offs are expected to continue, as
is the case with construction firms that closed their books
at the end of March.

The write-off formula offers companies a way out of
bankruptcy and severe attacks on executives' responsibility
for such a state of affairs. For banks, it has the merit of
reducing their short-run losses. For these reasons,
borrowers and lenders would seem to have recourse to the
formula.  But dealing with the debt issue this way results
in the loss of equitability, transparency and plausibility
when compared with solutions achieved through the legally
prescribed formula.

Much of the recourse to the write-off formula is merely the
upshot of a "conniving relationship" between major
corporations, which have stumbled because of a loose
stewardship during the asset-inflation years from the late
1980s to the early 1990s, and the major banks bolstered by
infusions of tax money.

Small- and medium-sized and even lesser firms would have
nothing to do with the benefits that come large
corporations' way. In case of bankruptcy, their owners
often have to sell off all of their assets to repay the
claimants.  If this moral hazard is allowed to proliferate,
the major banks will come under more intense fire as a
result. (Asahi News Service  24-April-2000)

TAKA-Q CO.: Continues losing streak in FY99
Strapped by intensifying price competition in men's
clothing, Taka-Q Co. (8166) sustained a net loss of about
2.29 billion yen in the fiscal term ended February, for its
ninth straight year of red ink.

The menswear firm reported a net loss of some 1.69 billion
yen the previous year.  Taka-Q booked an extraordinary
charge of roughly 450 million yen to write down the value
of shares in slumping affiliates. The one-time charge
contributed to the widening losses, the company said.
(Nikkei  24-April-2000)


KOREA DEVELOP.BANK: To become financial holding co.?
The Korea Development Bank (KDB) is likely to become a
financial holding company with affiliates in financial
sectors such as stock, insurance and asset management.

The Korea Institute of Finance, in a report, said Monday
that the KDB should develop into a comprehensive and
leading entity in the corporate financial sector. It should
be ready to offer various financial services by taking over
an insurer, a securities firm, and an asset management
company by 2001.

The think-tank suggested that the KDB should take over an
insolvent brokerage firm and acquire an insurer through
restructuring or set up a specialized new insurance firm.
The asset management firm should be set up in a joint
venture with a foreign partner. Once this is accomplished,
the KDB can concentrate on wholesale banking only and leave
retail business to its affiliates.

The institute said the banking sector will see reform in
such a way that there will be one to two wholesale banks
and two to three retail banks to form a leading bank backed
up by small and medium-sized specialized banks, securities
and insurance firms.  (Asia Pulse  24-April-2000)

SAMSUNG MOTORS: Creditor vote on Renault deal
Creditors of Samsung Motors will hold a plenary session
tomorrow to vote on Renault's final terms on its
acquisition of the ailing Korean automaker, said main
creditor Hanvit Bank yesterday.

According to the bank, representatives of Samsung Motors
creditors and Renault reached a tentative agreement on the
French auto giant's takeover of controlling shares in
Samsung during their last-stage talks in Paris on Saturday.

The Paris agreement will be presented to a plenary meeting,
slated for tomorrow morning in Seoul, of Samsung Motors' 16
creditor institutions, for the final ratification, they
said. If the tentative accord is approved, the signing
ceremony will be held on Thursday or Friday in Pusan, the
host to Samsung's sole passenger-car plant. In the case of
disapproval, both parties are likely to resume negotiations
in Seoul.

Details of the Paris agreement were not revealed. But a
Hanvit executive said, "The cost of Renault's purchase of
about 70 percent of Samsung Motors is estimated to be in
the range of $550-570 million (609.4-631.5 billion won)."
Prior to Saturday's negotiations, Samsung creditors had
reportedly asked for $600 million, whereas Renault stuck to
$540 million.

At tomorrow's meeting, the 16 Samsung creditors will
exercise their voting rights at the ratio of credit to the
automaker. Over 75 percent of the votes are needed for
final approval. Analysts say the results are quite
unpredictable, noting that most creditor institutions had
strongly demanded a sale price of at least $590 million.

The Hanvit executive said Renault proposed paying $100
million in cash and assumed $200 million of Samsung's total
debts estimated at $3.7 billion, adding that the French
firm will pay the remainder out of Samsung's operating
profits over the next 10 years.

Under the deal, Renault will set up a new joint-venture
company to run Samsung Motors and hold about a 70.1 percent
stake in the concern, while the Samsung Group will take
over 19.9 percent and creditors the remaining 10 percent.
Renault is known to agree to keep Samsung Motors' SM brand
alive for five years, turning out 50,000 SM5 cars this year
and expanding the firm's annual capacity to 400,000 units
by 2005. Renault also pledged to retain all of Samsung's
2,000 employees and resume full-scale production, which has
been running at well below its annual capacity of 240,000
units a year.

Analysts speculated that should the Paris agreement be
endorsed, the possibility of Renault taking over the
Samsung Motors' truck plant in Taegu may become higher.
Renault has long had plans to buy the commercial-vehicle
plant from Samsung Motors or Daewoo Motor, they said.

If the Samsung-Renault deal goes through, it would be the
first-ever acquisition by a foreign firm of a local
carmaker. Samsung Motors, which was founded in 1995 and
started producing cars in 1997, was put under court
receivership 10 months ago.

Renault is expected to create enormous synergies by
combining its Japanese affiliate Nissan's technologies and
Samsung's cheap parts and labor. Renault's long-term plan
calls for a market share of 10 to 15 percent in Korea in
five years, or 127,000 units a year. Renault also expects
workers at the Pusan plant to increase to 35,000 persons
this year and 350,000 by 2005.

Meanwhile, officials at Hyundai Motor-Kia Motors feared
that Renault's takeover of Samsung would surely eat into
its mid-sized and recreational vehicle markets. (The Korea
Herald  24-April-2000)

SEOUL BANK: Deutsche Bank takeover not ruled out
Minister of Finance and Economy Lee Hun-jai said Sunday
that he does not rule out the possibility that Deutsche
Bank could eventually take over Seoul Bank.

The German bank signed on last week to take on the task of
normalizing the ailing Korean bank. Appearing on a KBS TV
program aired Sunday morning, Lee explained that it was
possible that the German bank might consider a takeover if
its credit evaluation, risk control, and management
overhaul of Seoul Bank leads it to believe that the Korean
bank could be profitable for it.

The minister also remarked that the government has thus far
earmarked a total of W64 trillion in public funds to
normalize Seoul Bank with about W5-6 trillion still left
for the job. Lee projected that there would be a demand for
up to W10 trillion in public funds by June and said he will
judge whether or not any additional public funds should be
channeled to Seoul Bank in accordance with public
consensus. (Digital Chosun  23-April-2000)


Cement Industries of Malaysia Bhd (Cima) and its loss-
making subsidiary Negeri Sembilan Cement Industries Sdn Bhd
(NSCI) have entered into a debt restructuring agreement
with the latter's lenders over a term loan facility of
RM405 million.

In an announcement to the Kuala Lumpur Stock Exchange, it
said the restructuring scheme represents an integral part
of Cima's overall strategy to acquire a cement plant in the
central region, which will help maintain the company's
strategic competitiveness in the cement industry. The
scheme will allow NSCI to operate without the restrictions
imposed as a result of the high gearing. The total
indebtedness arising from this term loan amounts to
RM425.56 million, including accrued and default interest.

Cima said the restructuring scheme involves the acquisition
of a 30 per cent equity interest in NSCI from Halla
Manufacturing Corp Ltd and a 35 per cent stake in
Perbadanan Kemajuan Negeri Negeri Sembilan (PKNNS), Cima's
subscription of 60 million new shares of RM1 each in NSCI
at par and the issue of RM166 million nominal value of
redeemable convertible secured loan stocks (RCSLS) to the
lenders. The acquisition of the NSCI shares from Halla has
been completed.

According to the company, the balance of the loan after the
proposed subscription of the NSCI shares and the RCSLS
issue will remain as a term loan to be settled in 12 equal
semi-annual instalments.  (The Edge  21-April-2000)

DIVERSIFIED RESOURCES: Places subsidiary with CDRC
Diversified Resources Bhd has placed its bus unit,
Intrakota Consolidated Bhd, with the Corporate Debt
Restructuring Committee due to its financial problems.
The company said in a statement it had not made any comment
that could be interpreted that the government may buy
Intrakota. (The Star  22-April-2000)

DIVERSIFIED RESOURCES: Briefs investors on restructuring
Diversified Resources Bhd met about 60 domestic fund
managers yesterday to win investor support for its new
business plans after the sale of its stake in Malaysia's
biggest car maker Perusahaan Otomobil Nasional Bhd.

DRB, as the company is also known, talked to potential
investors in a meeting organised by K&N Kenanga Bhd, a
Malaysian brokerage.  DRB chairman Mohd Saleh Sulong and
corporate finance director, Maznah Abdul Jalil, joined the
meeting, held two days after the company got the securities
regulator's approval for its new business structure.

"We will have our focus on five different industries," Mr
Saleh told Bloomberg News before the meeting. The five main
businesses are defence, so-called privatised government
projects, insurance, property and construction, and
information technology.

DRB is recasting its business and seeking to increase
returns after it gives up control of car maker
Proton.  In February, DRB said it would swap new stocks for
the remaining shares it does not yet own in Gadek
Malaysia Bhd, Gadek Capital Bhd and Hicom Holdings Bhd to
form a new merged company called DRB-Hicom Bhd.

"Among the privatised projects, we have the construction
work for the Rawang-Ipoh electrified double-tracking rail,
and an expressway construction, which should be beneficial
to us," he said.

Hicom is selling its 27 per cent controlling stake in
Proton to state-owned oil company Petroliam Nasional Bhd
for RM1 billion (S$446 million). Hicom is also in talks to
sell 32 per cent of Malaysia's biggest car distributor
Edaran Otomobil Nasional Bhd to Proton.

Earnings from Proton and EON account for 45 per cent of the
DRB group of companies' profit, said Seow Choong Liang,
head of research at K&N Kenanga. The brokerage house raised
its recommendation for the stock to "outperform" from
"market performer".

The sale, however, would give the company cash to pare down
borrowings.  "Once the sales go through successfully, the
DRB-Hicom group would have the cash to pay off its debts
and look for new business ventures," said Joe Liew, an
analyst at OCBC Securities (Melaka) Sdn.

As with many other diversified Malaysian companies, DRB was
in financial trouble when debts swelled amid decade-high
interest rates in 1998 and business slowed. DRB has more
than 30 units, whose businesses include property
development, vehicle inspection, leasing, bus operations
and auto distribution.  DRB told the Kuala Lumpur Stock
Exchange on Wednesday it had approached the government's
debt mediator, the Corporate Debt Restructuring Committee,
about resolving the "financial difficulties" involving its
money-losing bus unit Intrakota Consolidated Bhd.

The company has failed to make a profit on the bus routes
in the capital, Kuala Lumpur, since taking them over from
the government in 1994.  DRB's long-term debts totalled
more than RM3 billion, executive officials said in

The company's independent adviser for shareholders of DRB
forecasts the successful purchase of shares in its units
including Hicom, will increase DRB's earnings per share to
39 sen for the year ending March 31, 2002, from an expected
36 sen for the year to next March.  Yesterday, its shares
closed 2 sen down at RM3.22.  (Bloomberg, The Business
Times  21-April-2000)


FAIRGROUP: Open to talks with foreign investors
Following the lead of cash-strapped Uniwide Group of
Companies, department store operator Fairgroup is also
planning to open up several branches to foreign investment.

In an interview with BusinessWorld, Fairgroup spokesperson
Nitz Celso said the management, led by owner Danny Velasco,
will be prioritizing discussions with prospective foreign
partners this year who would be interested to tie up with
the company in running a number of Fairgroup stores.

"We're including that in our agenda for the year 2000 aside
from putting up more branches. We are open to joint
ventures with foreign retailers for our Makati operations
although we have not yet started discussions with possible
partners," she said.

The recently signed Retail Trade Liberalization Law allows
foreign investment in the retail industry, but with
capitalization requirements. Fairgroup currently operates
10 stores nationwide under Fairmart, Plaza Fair and
Faircenter department stores. Of the total, four stores are
located in Makati including the very first Fairmart store
established in 1975.

Fairmart joins cash-strapped Uniwide Group of Filipino-
Chinese businessman Jimmy Gow which also announced the sale
of its warehouse club business to French retailer Casino
Guichard.  Perrachon SA upon the implementaion of the
retail trade law.  Aside from the Casino Group, a number of
foreign groups have already expressed interest in entering
the local market including US-based Wal-Mart Stores, Inc.
and British firms The Boots Co. and Waitrose Supermarket

US-based oil refiner Caltex has likewise announced plans of
shifting its focus to retail expansion in the Philippines
to take advantage of the now liberalized retail industry.
President Estrada signed RA 8762, or the Retail Trade
Liberalization Act of 2000 last month. The government is
currently finalizing the implementing rules and regulations
that will set the specific guidelines of the new law.

Ms. Celso said Fairgroup will be also be tieing up with
Hong Kong-based Eton Group -- owned by taipan Lucio Tan --
in putting up a shopping mall in Dalian, China. She,
however, declined to provide details of the said joint
venture but hinted that the mall will be constructed in
2002. In the same year, the department store operator will
also put up the Fair Center Building in Manila.

In the local scene, Fairgroup is planning to open a mall in
Malabon this year as well as transform Fairmart Cebu into a
hotel to be named Magellan Colon Business Hotel. Plaza Fair
is also set to assume the business operations of other
Fairmart Cebu branches located in Basak, Lapulapu City and
Mandaue City.  The Fairgroup of stores started its mall
operations in 1975 with Fairmart in Makati as its first
store. From 1975 to 1989, the group was able to put up a
total of 10 stores located in various sites in Metro
Manila, Cebu and Cagayan De Oro.

Ms. Celso said the group operates with the "fair price
commitment" with focus anchored on effective service
delivery of world-class quality and competitive goods.
Fairgroup competes with bigger mall chain operators
including the SM Group of tycoon Henry Sy and the Ayala
Group in Cebu. (Business World  24-April-2000)

PHILIPPINE NAT.BANK : Gov't-L.Tan joint sale today
Under the final agreement between the government and
majority stockholder Lucio C. Tan, the winning bidder for
the 76% stake in the Philippine National Bank (PNB) will
have one month after bid results are disclosed to come up
with the money.

"Whoever wins has 30 days to pay," Bangko Sentral (Central
Bank) Gov. Rafael B. Buenaventura told reporters last week.

The deal to sell their combined 76% stake in PNB in a one-
time joint sale will be finalized today between Mr. Tan and
the government. Finance Undersecretary Cornelio C. Gison
said the deal will formalize an agreement to put Mr.
Tan's 46% stake in PNB together the government's 30% share
on the auction block on May 15.

The joint sale agreement will be signed by Mr. Tan and
Finance Secretary Jose T. Pardo in Malaca¤ang to mark the
103rd anniversary celebrations of the Department of Finance
(DoF).  In an April 5 letter to the DoF, Mr. Tan committed
to unload his 46% stake together with the government's
remaining 30% holdings in PNB to "attract more investors."

Under the agreement between the government and Mr. Tan, the
joint sale will be good for only one public bidding.  If
the bidding fails, the two parties are not bound to
undertake another joint sale, Mr. Gison said. The agreement
also states that the PNB shares should be offered to
bidders by May 15, per request of Mr. Tan. "That is the
deadline Mr. Tan indicated in his letter," Mr. Gison said.

But the agreement does not yet state a floor price because
the two parties are still waiting for a parallel audit of
PNB to be completed by SyCip Gorres Velayo & Co. and
Punongbayan & Araullo by the end of the month, Mr. Gison
said.  For his part, Mr. Pardo said the floor price will be
decided by Mr. Tan and the government a few days before the
actual bidding.

"There will be a floor (price). (But) we agreed that it
will be known only to Mr. Tan and myself and the governor
of Bangko Sentral," he told reporters last Wednesday.

Mr. Pardo met with PNB financial advisor Lehman Brothers
earlier this month to decide on a range of prices at which
to sell the shares.  The final "confidential" floor price
will be submitted to the financial advisors Lehman Brothers
and ING Barings, he said.

The joint sale agreement, meanwhile, also sets the bidding
schedule agreed upon by both Mr. Tan and the DoF and
approved by the Committee on Privatization, the
government's privatization arm.  Under that agreement, the
DoF will offer the block of shares to interested buyers on
May 15. The schedule also states that the block should be
sold by May 29.

Mr. Buenaventura, who also advises the government on PNB's
privatization, said May 29 has been set as the date for
opening the sealed bids and the announcement of the winning
bidder. He said the May 15 sale deadline, originally set by
Mr. Tan, has been modified as the deadline for the
submission of "earnest money" by interested parties to

"By May 15, qualified bidders will have to tender a certain
amount (of money) to be able to perform the due diligence,"
Mr. Buenaventura said.

However, the Bangko Sentral chief said the exact amount of
the deposit has yet to be determined by the selling
parties, together with the sale advisers Lehman Brothers
and ING Barings.

"(Interested buyers) will then have until May 26 to submit
their bids," he said, "and we will open the bids the
following Monday to make it very transparent."

Mr. Buenaventura said that aside from putting up a deposit,
a still undetermined fee will charged for the information
memorandum and pre-bid documents which will be available
from May 3 to 5. "We want to make sure they are serious
players," he explained.

All "front-ended" funds will be held in an escrow account
with a third party depository bank. Mr. Pardo earlier said
that up to four investors -- one local and three foreign
financial institutions -- have already expressed interest
in buying a "super majority" in the semi-private bank.

"Mr. Tan has agreed to only one bidding," Mr. Buenaventura
stressed. "There won't be a second attempt to prevent a
moro-moro (local parlance for farce) and ensure
transparency." (Business World  24-April-2000)

VICTORIAS MILLING CORP.: Keeps 'high' trucking allowance
Cash-strapped Victorias Milling Co. (VMC) has decided to
continue its aggressive campaign to attract sugarcane
planter-clients by providing them with high "trucking
allowance" despite complaints from other millers.

A VMC source said they decided three weeks ago to continue
offering a trucking allowance of PhP200 per metric ton of
cane to match a similar offer of their closest competitor
Hawaiian-Philippine Co., Inc. (HPCI).  A mill extends
trucking allowances to planters as an incentive to
encourage their continued availment of the mill's services.
The source, who requested anonymity, said VMC opted to
continue with its offer to prevent HPCI from winning over
VMC's existing clients in Negros Occidental.

"We have extended it until further notice. There is still
sugarcane left to mill and Hawaiian is still operating so
we would like to ensure that none of our canes will go to
them," the source told BusinessWorld in a telephone

Industry sources said in April 3, HPCI raised to as high as
PhP250 per MT its trucking allowance to planters coming
from the distant San Carlos district.  All other planters
milling with HPCI, meanwhile, got a PhP210 per MT
allowance.  VMC and HPCI have been slugging it out to
attract planters from San Carlos because of that area's
"high-quality" canes. The San Carlos district is located
about 120 kilometers away from VMC and 135 km away from

The VMC source said they will likely extend their existing
allowances for planters until the end of their milling
season in June or July.  VMC had originally intended to
provide increased trucking allowances for only one month
from March 6 up to April 9. But it announced on April 7
that it will continue granting its PhP200 per MT trucking
allowance indefinitely.

The announcement came four days after HPCI started offering
PhP250 per MT allowance.  VMC's new trucking rate Incentive
represents a PhP50 or 30% increase from an original level
of PhP150 per MT.  Industry players estimate that VMC had
already spent an extra PhP20 million in March alone to
cover the increase.

Since VMC will be operating till June or July, it is
estimated to fork out a total of PhP80 to PhP100 million
for trucking allowances alone.  VMC expects to impove
earnings by processing more canes but some industry players
think the move will only hurt the miller given its already-
precarious financial state.

VMC is currently saddled with a huge PhP6.5-billion debt.
Observers say VMC can use the amount instead for needed
repairs during the off-season starting July or August.
However, the VMC source said they have no choice but to
continue engaging HPCI in a price war on trucking
allowances unless they lose planter-clients to the rival

"Wala rin kaming magawa because if we don't keep it at the
level now, mawawalan din kami ng cliente, and that will
also be bad for us [We could not do anything else because
if we don't keep it at the level now, we will lose our
clients just the same, and that will be bad for us]," the
source said.

The source added that VMC may have to realign some of its
expenditures to ensure that the firm will be able to
finance yearly repairs.  The source said the VMC management
committee (mancom) has approved their move to continue
granting increased trucking allowances.

"They (mancom) was initially apprehensive but they
supported us just the same because we also won't be able to
pay our creditor banks if we lose our clients to another
mill," the source said.

The mancom, composed of selected VMC officials and
representatives from its creditor banks, has been tasked by
the Securities and Exchange Commission to oversee the
rehabilitation of VMC.  The VMC source said they will
reduce their trucking allowance incentive for the next crop
year but declined to state a particular level.

Industry players have blamed VMC for allegedly triggering
the ongoing "price war" with HPCI.  They said VMC violated
a "gentleman's agreement" between the two mills when it
started offering a trucking allowance of PhP170 per MT,
PhP20 above the PhP150 per MT level agreed upon by the two

VMC officials, however, contend that they were merely
reacting to the move of other mills (not HPCI) to offer
free transport services to planters. (Business World  24-

WESMONT INVEST.CORP.: 2nd investor group to sue for fraud
A group of investors claiming to have been "ripped-off" by
Westmont Investment Corp. (Wincorp) is getting ready to
file a case before the corporate regulator's prosecution
and enforcement department (PED) on alleged fraudulent acts
of the troubled investment firm.

Securities and Exchange Commission (SEC) chairman Lilia R.
Bautista said a lawyer representing several Wincorp
investors, one of which has over PhP30 million in claims,
will file a case against Wincorp for alleged fraudulent
practices.  Earlier, local brokerage house, Pearlbank
Securities, filed a PhP40-million lawsuit against Wincorp.

According to Pearlbank, it was made to appear as a borrower
in several debt instruments Wincorp issued to some of its
investors. The local brokerage said it "owes nothing to
Wincorp or its investors," but was unwittingly named a
borrower when several Wincorp investors demanded payment
amounting to over PhP274 million early this year.

Moreover, Pearlbank said "in representing to different
investors that (it) borrowed against their investments,"
Wincorp "violates (Pearlbank's) right and reveals a device
or scheme employed by Wincorp... amounting to fraud and
misrepresentation detrimental to the interest of the
public." Wincorp started facing liquidity problems after
its funders -- over 2,000 Binondo- and Cebu-based Chinese-
Filipino businessmen -- started pre-terminating their

At least 20 companies linked with former Finance Secretary
Edgardo Espiritu, one of Wincorp's founders, and his
business associates were identified as the major borrowers
of funds pooled by Wincorp. Most of the borrowers were also
shareholders of listed firm Unioil Resources and Holdings
Co., Inc. which owns 100% of Wincorp.

Meanwhile, SEC sources said the brokers and exchanges
department (BED) -- the group conducting an audit on the
investment firm's books -- was said to have recommended the
issuance of a cease-and-desist order (CDO) against Wincorp.
According to the source, Wincorp may have violated the
rules on the issuance of commercial paper when it issued
promisory notes to its investors.

On her part, Ms. Bautista said the basis for the
recommended issuance of the CDO is still very light and
asked the BED to firm up its case against the investment
firm before the commission can enforce tougher sanctions.
Besides, she added, Wincorp has already stopped its

Meanwhile, the BED admitted earlier that it is having
difficulty finding evidence to support the alleged
fraudulent practices of Wincorp. Wincorp is being
investigated for allegedly violating the "19-lender rule"
prescribed under the Investment Houses Law which limits to
19 the number of investors in an investment house.

At present count, Wincorp is said to have at least 2,000
investors, the SEC source added. (Business World  24-April-


BANGKOK BANK: Major banks post Bt13B Q1 total loss
BANGKOK METRO.BANK: Major banks post Bt13B Q1 total loss
BANK OF AYUDHYA: Major banks post Bt13B Q1 total loss
Thirteen major banks reported a combined loss of 38 billion
baht after tax and loan-loss provision appropriation, only
three banks saw net profit in the first quarter.

Thai banks are required by regulators to allot funds to
back up defaulters by year-end. Without the required loan
provision, six instead of three banks would have had posted
net profits.  ABN Amro Holding's Thai unit Bank of Asia
(BOA), Siam Commercial Bank (SCB) and Thai Farmers Bank
(TFB) unveiled first quarter profits while most others
reported losses.

Bangkok Metropolitan Bank (BMB), seized by the government
two years ago to avert a bank run, reported the heaviest
losses of about 1.2 billion baht. The central bank has
repeatedly delayed the sale of TMB to HSBC, saying the bid
is too low.

Isaraporn Buranikakon, a banking analyst said, however,
that the banking system is improving due to a substantial
reduction of non-performing loans (NPL), adding that the
loan and deposit rate gap had widened on last year. She
said BOA's main profit was driven by the bank's service
charges while Bank of Ayudhya's (BAY) main earnings derived
from widening interest rates. BAY interest variance was
upped to 1 percent in the fourth quarter of 1999 from 0.6-
0.7 percent.

BAY reported that its first quarter loss was 1.4 times
larger than that of last year, as it increased its reserves
for loans that may not be repaid. Interest and dividends
fell 20 percent to 6.18 billion baht, as the bank eased
debt repayment terms for customers. Still, interest rate
expenses fell by almost 40 percent because the bank lowered
its deposit rates during last year.

Bangkok Bank (BBL) Executive Vice President Nimit
Nontapunthawat said Thai banks' improving operating results
mainly stemmed from the spreading of interest rate gaps,
adding that banks' downsizing and early retirement programs
had helped trim expenses significantly.

BBL posted its eighth consecutive quarterly loss, as it set
aside record reserves to cover loan defaults. The bank said
it lost 22.3 million baht in January-March. The lost was
expected though, as the bank needs more loan provision to
meet central bank standards, which are being raised on
December 31.

At the beginning of this year, BBL said it had 86 percent
of the reserves needed to meet the year-end standard, with
another 25.5 billion baht required for full coverage. The
bank said full provision would be achieved by the middle of
the year.

TFB, meanwhile, posted quarterly earnings of 1.2 billion
baht, but said it spent 900 million baht in compensation on
its early retirement program, resulting in 300 million baht
net profit, as compared to 7.2 billion baht loss the same
period last year. (Business Day  24-April-2000)

BANGKOK BANK: Hastening bad-debt restructuring
DBS THAI DANU BANK: Hastening bad-debt restructuring
SIAM CITY BANK: Hastening bad-debt restructuring
SIAM COMMERCIAL BANK: Hastening bad-debt restructuring
THAI PETROCHEMICAL BANK: Hastening bad-debt restructuring
Thai banks are striving to speed up the debt restructuring
processes, in a move aimed at leveling the playing field
with foreign-controlled banks.

Bangkok Bank (BBL) announced it had restructured 30 billion
baht of bad loans during the first quarter, excluding Thai
Petrochemical Industry's bad loan.  Deja Tulanun, BBL Vice
President, said most restructured debts belong to large and
medium-sized enterprises, adding that the figures were more
than the bank had expected.

"We had said all along that we plan to restructured debt
worth up to 100 billion baht this year. The 30 billion
figure exceeded the pace we had anticipated." said Deja.

However, the debt figure does not include TPI's loans of
US$900 million which TPI stopped paying in 1997 after the
depreciation of the baht. BBL said it expected TPI's case
to be settled before year-end, which would reduce its NPL
level enormously.  Deja also pointed out that Thai Banks
were at a disadvantage compared to foreign-controlled banks
which are virtually free of NPLs, saying that the priority
of Thai banks' is to reduce NPLs to the 10-20 percent level
by year-end.

Meanwhile, Siam City Bank (SCIB) President Pitoon Kijsomret
admitted that SCIB's main concern was its NPL level which
had not declined to an adequate level. He added that the
bank had restructured debts worth 17.5 billion baht in the
first two months of this year, or 305 NPLs - mostly large
enterprises such as Tanayong's skytrain project, and hotel
and resort industry debts.

SCIB said it expected to restructure five to six billion
baht more in bad loans by end of April.  DBS Thai Danu Bank
(DTDB) disclosed that the bank had restructured three
billion baht in the first quarter, reducing NPLs to about
45 billion baht.  Siam Commercial Bank (SCB) said it debt
restructuring rate was not impressive during the first
quarter, only five billion baht of bad loans had been
reformed. However, the bank said it hoped to restructure 45
billion baht in bad loans by year-end. (Business Day  24-

PADAENG INDUS.: Investor negotiations delayed
Negotiations between Padaeng Industry Plc and a potential
investor on the private placement of its remaining
unsubscribed 75. 1 mln new shares have been delayed, vice
president Anita Maria told AFX-ASIA.

The negotiations are unlikely to be completed by end-April,
she said.  When the company announced the start of the
negotiations on March 21, it said the talks would be
completed within a month.  She did not identify the
potential investor.

However, a construction analyst with a local brokerage said
he believes Padaeng Industry has already concluded the

"I have learned that the company has concluded a
(partnership) deal with one investor whose name has been
reported earlier, Commonwealth Bank (of Australia)," he

The analyst said he expects the selling price to be at most
12 baht per share, noting the current market price of 12.25
baht compared with previous speculation of a selling price
of 12-14 baht per share.

"Padaeng Industry shares were steady today after last
week's gains .... so I have a feeling that market
participants might have already had inside information
(about this deal)," he said.

Another local anlayst said Padaeng Industry has an
agreement with creditors to complete the 75.1 mln share
sale by September 15 in order to raise cash to repay debt.
He said he expects the selling price to be at 10 baht per

"If the company sells its shares at 10 baht as we have
expected, it would raise 751 mln baht. The 10 baht per
share selling price is close to its book value," he said.

Padaeng closed down 0.25 baht at 12.00 on trade of 17,230
lots.  (AFX News Limited  24-April-2000)

THAI PETROCHEM.INDUS.: Prachai says `no hard feelings'
Prachai Leopairatna is in a surprisingly jovial mood,
smiling expansively as he walks the corridors of Thai
Petrochemical Industry.  The TPI chief executive bears no
grudge, after losing perhaps the biggest fight in his life
in a two-year long battle with creditors over the control
and future of the industrial conglomerate.

Indeed, earlier in the morning on the day he spoke to the
Post, Mr Prachai had met for several hours with Effective
Planner's Anthony Norman, his main nemesis in the
protracted court battle over control of TPI's restructuring
plan.  Both emerged from the conference room smiling and
shaking hands, an amazing turnaround given the weeks spent
in mudslinging and media attacks waged by both sides up to
last week's creditor vote.

"It's been a lesson for me, an important chapter of my
life," Mr Prachai muses.  "There have been ups and downs.
There has been pain, but with everything settled, TPI can
move on. That's always been my hope."

Last week, creditors formally voted in favour of Effective
Planner to draft and oversee TPI's $3.5 billion
restructuring plan.  Spinning the decision in a favourable
light, Mr Prachai said that having Effective Planner come
in was similar to TPI bringing in new outside professionals
to help straighten out the 20-year-old business.

"The [Leopairatna] family alone can't do everything," Mr
Prachai said, shrugging. "With outsiders coming in, at
least we can prove once and for all that we have run this
company transparently and efficiently."

Mr Prachai and his brothers, who helped transform a family
rice-trading firm into one of the largest fully integrated
petrochemical firms in the region, control 280 million
shares out of 1.95 billion issued.

Negotiations over how to restructure and recapitalise the
company broke down last year. Many viewed the case as a key
barometer of the effectiveness of the bankruptcy code and
the ability of creditors to enforce their rights, a crucial
test case given the hundreds of billions of baht in bad
debt still held by local banks.

Mr Prachai makes no apologies for his efforts to ward off
creditors and protect the interests of the company. In one
sense, he has won important concessions from creditors on
issues such as the sell off of assets and future default
terms.  At the same time, he says he holds no grudges
against the major creditors, including the largest, Bangkok

"It's no different than a boxing match. As one of the
fighters, I have to fight to uphold my pride. You can't
just give up," he said.  "It's just one scene, a fight in
the ring, and it's over now."

Mr Prachai smiles. "I don't have anything against Bangkok
Bank. After the fight, once the winners and losers are
known, I consider the game finished.  We fought in the
ring, each taking their blows. Now it's done, and we can
step down from the stage, sit and eat together. For me, I
have no problems."

One olive branch offered by Effective Planner already has
been to have Mr Prachai remain as TPI chief executive
officer, as well as to participate in the drafting of the
restructuring plan.  Executives say they expect the plan to
be ready for final approval by the creditors within three
months.  Both Mr Prachai and Mr Norman are in firm
agreement on one thing: the main objective in the
restructuring is to maintain TPI's leading position in the
petrochemical industry.

"I want the company to be stronger, to remain Thai and
compete successfully with foreign firms, even once full
liberalisation arrives," Mr Prachai said.

He said he expected to retire from the company once the
restructuring was completed in 2003, possibly taking an
advisory post but staying out of day-to-day management.

"I want to retire once TPI exits the restructuring process.
Actually, I had planned to step down before this, but
couldn't due to the crisis," said Mr Prachai, who is 55.
"As you get old, your memory fades. You have to stop. I
think once I leave, I'll spend my time travelling."

Under the restructuring plan, new equity will be raised to
help retire existing liabilities and reduce TPI's debt-to-
equity ratio to around 4.5 times from more than six at
present.  TPI employs more than 10,000 people in over 27
companies, with interests in petrochemicals, construction
materials and energy.

For 1999, the company reported net losses of 6.7 billion
baht on revenues of 58.9 billion. Consolidated assets
totalled 177.17 billion baht as of the end of December,
with liabilities of 142.6 billion.  Share prices of TPI on
the Stock Exchange of Thailand closed on Friday at 9.8
baht, up 40 satang, on trade worth 99.44 million baht.
(Bangkok Post  24-April-2000)

S U B S C R I P T I O N  I N F O R M A T I O N

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