TCRAP_Public/000503.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, May 3, 2000, Vol. 3, No. 86


* A U S T R A L I A *

TELSTRA: Credit ratings downgraded

* C H I N A  &  H O N G  K O N G *

BEAUTIKIT SERVICE CO.LTD.: Facing winding up petition
GOLDEN WAY PROPERTIES LTD: Facing winding up petition
GOLDFIT LIMITED: Facing winding up petition
INCON TRADING CO.LTD.: Facing winding up petition
LAI SUN DEVELOPMENT: Nears plan to wipe HK$4B off debt

* I N D O N E S I A *

PEREGRINE FIXED INCOME: Court rules against
PT GARUDA INDONESIA: Looking for creditor OK of rehab

* J A P A N *

AIWA CO.: Posts 11.5B Yen net group loss
BANK OF TOKYO MITSUBISHI: Failed to declare Y6.5B in income
DAIICHI MUTUAL FIRE & MARINE INS.: Takeover candidates?
DAIICHI MUTUAL FIRE & MARINE INS.: Can't write new biz
HINO MOTORS LTD.: Posts 15.7B Yen pretax loss for FY99
L KAKUEI CORP.: To get financial assistance
NISSAN DIESEL MOTOR CO.: 5-yr.,80B Yen cost-cutting plan
TOSHIBA CORP.: Reports 28B Yen group net loss in FY99

* K O R E A *

DAEWOO GROUP: Gov't to speed up foreign debt purchase
DAEWOO HEAVY INDUS.: Minor shareholders get workout stop
HYUNDAI ENG.& CONST.: Samsung Life calls loan due early
HYUNDAI GROUP: Gov't bailout ruled out
HYUNDAI INVESTMENT TRUST: Bad assets exceed W2 Trillion
HYUNDAI INVEST.TRUST: Family contribution,bailout near
HYUNDAI INVEST.TRUST: To get rehab plan this week
HYUNDAI INVEST.TRUST: Capital increase proposed to save

* M A L A Y S I A *

TIME dotCOM: Renong boss says creditors paid by Aug.

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

PHILIPPINE NAT.BANK: Only experienced operators in auction
PHILIPPINE TEL.& TEL.: Approves creditor's rehab plan
URBAN BANK: DOJ probe urged into `holiday'
URBANCORP SECURITIES: Declares voluntary suspension
WESTMONT INVEST.CORP.: Facing loss of license,registration

* S I N G A P O R E *

FRASER & NEAVE: Gives up on loss-making investment

* T H A I L A N D *

DBS THAI DANU BANK : Announces recapitalization


TELSTRA: Credit ratings downgraded
Major credit ratings agencies have made good their warnings
to downgrade Telstra, in the wake of its $5 billion
investment plan for Hong Kong's Pacific Century Cyberworks.

Moody's and Standard and Poor's have today lowered
Telstra's long-term ratings, following last month's
announcement. Among the concerns, they list: the
significant infrastructure investment required; the slim
chances of generating stable cash flow in the short term;
and the limitations in raising funds, as Telstra is
majority government-owned.  Teslstra's financial profile
also was cut thanks in part to its exposure to Internet
companies and continued government ownership of Australia's
largest company.

Telstra shares fell 14 cents today to $7.21.  Worse news
still is the Telstra 2 instalment receipts, sold in the
Howard Government's T2 offer last November, which continue
to slip well below the $4.50 a share sale price.
The T2 shares closed down 14c at $4.26.

Major fund managers warned yesterday of continued
uncertainty surrounding Telstra and its share price, as it
starts taking bigger risks to try to find new businesses
outside Australia to offset local competition that is
starting to dent its profitability.

Moody's cut its ratings on Telstra's senior debt to Aa3
from Aa2 yesterday. Its highest rating is Aaa. S&P also
moved yesterday afternoon, cutting Telstra's long-term
credit rating one notch to AA from AA+. But it warned the
rating was still on watch, meaning the next move was likely
to be down to AA-.

"The downgrade reflects Telstra's strategy to target the
higher risk areas of data, Internet and mobile sectors for
growth, compared with its traditional voice and directories
services," S&P said in a statement.

Charles Macgregor, a senior analyst at Moody's , said the
Aa3 rating still put Telstra on a par with most
telecommunications companies in Europe.  But the company's
recent deal in which it will use debt to spend up to $5
billion investing in Hong Kong-based Internet company
Pacific Century CyberWorks, run by 33-year-old tycoon
Richard Li, has prompted some credit concern.

"The rating acknowledges the inherent differences in the
corporate cultures of Telstra and PCCW and the issues this
may create should the proposed joint ventures encounter
problems," Moody's added in a statement.

And dealing with the big issue, hanging over the company,
Moody's said majority government ownership restricted
Telstra's financial and operating flexibility.
Any response it made to competition such as reducing staff
or services would attract considerable public scrutiny.

Moody's also warned that Telstra's inability to issue
equity also would restrict its ability to attract the best
executives.  Lyn Allison, Democrats telco spokesperson,
said the Moody's report did not convince her that
government ownership hampered Telstra. She also claimed
Moody's approached Telstra from an ideological stance that
privatisation was better than government control.

"I would expect Moody's want to deal with Telstra as a
private company and so it doesn't surprise me that they
have stated 50.1 per cent government ownership is a
restriction.  Moody's and the government may want to see
Telstra fully privatised but we continue to hold the old-
fashioned view that Telstra is more than a private company
... all they see is the impediments to investment whereas
they don't care about people in the bush getting the
Internet or the Universal Service Obligation. They don't
take into account the public interest." (ABC News, The
Australian  03-May-2000)

C H I N A  &  H O N G  K O N G

BEAUTIKIT SERVICE CO.LTD.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 31 on the petition of Lin
Wei Chin for the winding up of Beautikit Service Company
Limited.  A notice of legal appearance must be filed on or
before May 30.

GOLDEN WAY PROPERTIES LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 24 on the petition of Super
Mate Limited for the winding up of Golden Way Properties
Limited.  A notice of legal appearance must be filed on or
before May 23.

GOLDFIT LIMITED: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 17 on the petition of
Cheung Yuk Wah for the winding up of Goldfit Limited.  A
notice of legal appearance must be filed on or before May

INCON TRADING CO.LTD.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 10 on the petition of Ng
Siu Lan for the winding up of Incon Trading Company
Limited.  A notice of legal appearance must be filed on or
before May 9.

LAI SUN DEVELOPMENT: Nears plan to wipe HK$4B off debt
Lai Sun Development is in the final stage of mapping out a
restructuring proposal that could reduce its debt to HK$5
billion from HK$9 billion.

A formal proposal would be presented to creditors early
next month, said Mark Lee Po-on, director of parent Lai Sun
Garment (International).  Lai Sun Development had received
initial support from creditors, he said, adding that a big
improvement would be seen as the proposal could help to cut
its borrowing by more than 40 per cent to HK$5 billion.

The company had targeted the HK$5 billion debt level after
taking into consideration the cash generated from the sale
of Furama Hotel in Central for loan repayment, he said
after the group's extraordinary general meeting yesterday.
Lai Sun Garment deputy chairman Lam Kin-ming also attended
the meeting, in which shareholders approved Lai Sun
Development and Lai Sun Hotels International to form a
joint venture to acquire 50 per cent of for HK$300

Mr Lee said Lai Sun Development should not make further
provisions for selling the Furama, given the interim result
had fully covered the diminution in value of the disposal.
Lai Sun Development on Thursday reported a loss of HK$1.33
billion for the six months to January 31.  The poor result
was due to a HK$1.2 billion provision for projected losses
from selling the Furama, and the fall in values of certain
hotels in the group.

To reduce debt, Mr Lee said Lai Sun Development also
planned to sell three non-core residential and commercial
properties worth about HK$350 million to raise cash. He
said Lai Sun Development also owned a lot of agricultural
land, enough to provide a gross floor area of one million
square feet, which was either for sale or joint-venture
development with partners.

Lai Sun Development's other investments had provided
attractive returns including its 11.5 per cent in Sunday
Communications currently worth up to HK$700 million and its
17 per cent stake in ATV, Mr Lee said.  Although no major
provisions were expected to be made, he said Lai Sun
Development's full-year result would not have a significant
turnaround. (South China Morning Post  29-April-2000)


PEREGRINE FIXED INCOME: Court rules against
The South Jakarta court has ruled against Peregrine Fixed
Income Ltd (PFIL) in a 21.5 mln usd cash collateral dispute
with PT Griya Pesona Mentari, a unit of PT Matahari Putra
Prima group.

Peregrine is currently still holding the cash collateral
for a derivative transaction worth 160 bln rupiah signed in
Jan 24, 1997, judge R. Sunarto said.  Sunarto said the
transaction was then changed into a cross-currency
transaction worth 67.5 mln usd that was to be effective
starting Jan 24, 1998.

However, Sunarto said the transaction failed to be realised
because Peregrine was liquidated a week before the
effective date.  "So, Peregrine actually has violated the
agreement," he said.

He ordered the transaction cancelled and told Peregrine to
return the collateral to Griya Pesona.  He also ordered
seizure of Peregrine's 260 mln usd loan to PT Steady
Safe pending repayment of the collateral plus 6 pct
interest rate per annum.  (AFX News Limited  02-May-2000)

PT GARUDA INDONESIA: Looking for creditor OK of rehab
The country's flag carrier Garuda Indonesia plans to go
public in 2003 after completing debt restructuring, its
president said.

Abdul Gani said Garuda hopes to secure the agreement from
its creditors to restructure its debts of US$1.2 billion
next month.  Garuda's spokesman Emirsyah said the company's
creditors had agreed to roll over the repayment of its
debts from 12 years to 16 years with guarantee from the
government as the shareholders.

Emirsyah said 50% of Garuda's debts are to commercial banks
and creditors in Europe, 34% to international banks, 15% to
Indonesian state banks and 1% to other Indonesian banks.
Gani said Garuda would seek to form strategic alliance with
investors either after or before its plan to go public.
(Asia Pulse  01-May-2000)


AIWA CO.: Posts 11.5B Yen net group loss
Aiwa Co. (TSE:6761) reported Thursday a record group net
loss of 11.5 billion yen (US$ 108.7 million) for the year
ended March 31, compared with profit of 3.5 billion yen a
year earlier.

The loss is attributed to the company's slow response to
the yen's appreciation as well as production delays caused
by the difficulty in procuring electronic parts. The
company will reduce the second half dividend by 5 yen to 6
yen, cutting the annual dividend to 14 yen -- the first
fall since the year ended November 1986 when the company
canceled the payout.

Sales dipped 6% for the second consecutive fall. The higher
yen depressed sales by 41.8 billion yen, causing pretax
income to shrink by 4.2 billion yen.  Inventories of semi-
finished products built up 27% to 16.5 billion yen.

According to the consolidated cash flow statement, capital
investment reduced cash flow by 17.1 billion yen, but
collection of accounts receivable remained at 4.8 billion
yen. Most of the cash shortfall was covered by bank
borrowing. The cash balance for financial activities
resulted in a 12.1 billion yen inflow.

For the year through March 2001, the company assumes
further appreciation of the yen, to 98 yen against the
dollar and 101 yen to the euro. It will also review its
parts procurement system. Group operating profit is
estimated at 7.3 billion yen with net profit projected at
1.8 billion yen.  (Nikkei, Asia Pulse  28-April-2000)

BANK OF TOKYO MITSUBISHI: Failed to declare Y6.5B in income
An inspection by the local branch of the National Tax
Administration has found Bank of Tokyo-Mitsubishi (8315)
failed to declare a total 6.5 billion yen in income for
three years ended March 1999.

Japan's top bank is said to have deliberately concealed 400
million yen by transferring profits to overseas
subsidiaries.  The Tokyo Regional Taxation Bureau ordered
the bank to pay back taxes and penalties estimated at more
than 2.5 billion yen.

The bank paid higher commissions to overseas subsidiaries
than it should have by transferring profit to those with
poor earnings, according to sources within the tax
authority. The bureau's findings concluded the bank
intentionally disguised the 400 million yen.

"The amount should have been declared as head office
income," the tax authority said, also discovering
accounting errors.

BOT-Mitsubishi, the core financial institution of the
Mitsubishi group, was formed in April 1996 through the
merger of Mitsubishi Bank and Bank of Tokyo. Capital stands
at 785.9 billion yen and it had 323 domestic branches and
79 overseas offices at the end of last September. A merger
with Mitsubishi Trust & Banking Corp. (8402) is planned for
next April, creating the world's fifth largest financial
group. (Nikkei  28-April-2000)

The Financial Supervisory Agency on May 1 ordered Daiichi
Mutual Fire & Marine Insurance Co. to halt operations,
marking the first time in the postwar era that a Japanese
nonlife insurance firm has collapsed.

Daiichi Mutual Fire told the FSA earlier May 1 that it was
unable to continue operations. The company will be unable
to sign new policies or dissolve existing contracts.
Existing policies will be guaranteed in full until March
2001 by the Non-Life Insurance Policy-Holders Protection
Corp. of Japan, a fund created by the industry to protect
policyholders from any insurer's collapse.

From April 2001, however, some policyholders will only
receive 90 percent of the value of their policies and any
interest earned.  The FSA placed Daiichi Mutual Fire under
the supervision of the Marine & Fire Insurance Association
of Japan. The agency also asked the association to seek
another insurance firm willing to assume the policies of
the collapsed firm.

As of the end of fiscal 1999 in March, Daiichi Mutual Fire
had excess liabilities of 48.8 billion yen ($465 million).
Part of that was due to an increase in funds for reserves
and amortization following the FSA's finding that Daiichi
Mutual Fire had been illegally hiding losses.

The company announced that at the end of fiscal 1998 its
solvency margin stood at 330 percent. The solvency margin
measures an insurer's ability to pay out obligations in the
event of a disaster or unforeseen loss.  The FSA
investigated the company's books and found that the
insurer's solvency margin was actually negative 74.7
percent as of April 10 this year. The high number was due
to insolvent loans and unrealized losses on the company's

The agency ordered Daiichi Mutual Fire to correctly
calculate its stockholdings and outstanding loans for the
fiscal 1999. On April 24, the company reported a revised
solvency margin of 160 percent. The 200 percent level
is seen as the minimum at which sound management can be

Daiichi Mutual Fire had been negotiating with financial
institutions to shore up its capital base. The agency gave
the nonlife insurer until early May to complete such
negotiations. However, Daiichi Mutual Fire decided to
discontinue operations after it failed to reach a deal.
From April 2001, automobile liability insurance and
earthquake insurance policies will be guaranteed in full.
However, payments for insurance policies for automobile,
fire and damage will be cut by 10 percent.

Holders of annuity-type fire and damage insurance policies
will have 90 percent of the principal of their policies at
the time of the collapse guaranteed. Interest on those
policies will be reduced according to the financial state
of Daiichi Mutual Fire.  When the policies are taken over
by another insurance firm, a final decision on the amount
the policy value will be reduced will be determined based
on changes made in the contracts.  (Asahi News Service  01-

DAIICHI MUTUAL FIRE & MARINE INS.: Takeover candidates?
Marine and Fire Insurance Association of Japan chairman
Hiroshi Hirano said the group will form a team to
investigate the asset value of collapsed Daiichi Mutual
Fire & Marine Insurance Co Ltd.

The association will also seek candidates to take over the
insurance firm's operations, he said, although a schedule
for these moves has yet to be finalised.  The move follows
receipt of orders by the Financial Supervisory Agency
preventing Daiichi from issuing new contracts or cancelling
its existing contracts as well as paying dividends.

At end-March, Daiichi had excess liabilities of 47.8 bln
yen, according to the FSA. Hirano described the collapse as
"regrettable," but would not comment directly on whether it
is likely to be an isolated case.

"I don't know yet. It will not be clear whether Daiichi's
case was special until we finish our investigation," he

Hirano said the association will urge non-life insurance
companies to strengthen the management of risk and promote
further disclosure to avoid further collapses. The
association has yet to decide whether it will contribute
funds to make up for Daiichi's losses, he said, adding that
the decision will be made after the investigation is
completed.  The association has maximum reserve funds of 65
bln yen available, Hirano noted.  Contracts with Daiichi
will be protected until March 2001, whether takeover
candidates appear or not.  (AFX News Limited  01-May-2000)

DAIICHI MUTUAL FIRE & MARINE INS.: Can't write new biz
The Financial Supervisory Agency said it has ordered
Daiichi Mutual Fire & Marine Insurance Co Ltd to suspend
part of its operations following the company's decision to
give up attempts to continue operations.

On the balance sheet, Daiichi Mutual had excess liabilities
of 47.8 bln yen at end-March 2000, according to an
investigation conducted by the agency, it said. Taking into
account special reserves, such as dividend reserves of 42.5
bln yen at end-March as well as unrealized securities
losses in securities of 32.0 bln yen, the excess
liabilities declined to 37.2 bln yen, it said.

The agency said Daiichi Mutual is suspended from taking new
insurance contracts and cancelling its existing contracts
as well as paying dividends, although insurance payments
and collecting of insurance dues will continue.  (AFX News
Limited  01-May-2000)

HINO MOTORS LTD.: Posts 15.7B Yen pretax loss for FY99
Hino Motors Ltd. (7205) said Friday that it recorded a 15.7
billion yen pretax loss for fiscal 1999, better than the
42.7 billion yen loss it posted the year before, but worse
than its previous forecast of an 11.3 billion yen loss.

Hino, a truck manufacturer in the Toyota Motor Corp. (7203)
group, has been making major rationalization efforts amid
sluggish truck demand at home, and capital gains from sales
of stockholdings fell short of expectations.

The company's net loss was 15.4 billion yen, an improvement
from a 35 billion yen loss the year before.  Sales were
474.1 billion yen, up 13%. While overall domestic demand
for trucks with payload capacities of 4 tons or more came
to 74,000, worse than the 80,000 originally expected, Hino
was able to boost revenue due to increased sales to Toyota
Motors.  The company posted an operating loss of 19.8
billion yen. (Nikkei  29-April-2000)

L KAKUEI CORP.: To get financial assistance
The bankrupt L Kakuei Corp will receive financial
assistance from mid-sized developer Joint Corp, the Nihon
Keizai newspaper reported.  (AFX News Limited  01-May-2000)

NISSAN DIESEL MOTOR CO.: 5-yr.,80B Yen cost-cutting plan
Through collaboration with leading shareholders Renault SA
and Nissan Motor Co. (7201), Nissan Diesel Motor Co. (7210)
plans to slash procurement costs by 60 billion yen within
three years and consolidated liabilities by 80 billion yen
within five years, President Hirofumi Nakazawa said Friday.

The forecasts are included in the company's five-year
fiscal 2000-2004 plan unveiled the same day. Group
liabilities would fall to 400 billion yen by the end of
fiscal 2004.  Nakazawa said the recent capital tie-up
between Renault and Volvo AB, which has an alliance with
Mitsubishi Motors Corp. (7211), will not affect Nissan

The plan calls for the annual supply of 30,000 diesel
engines to Renault from 2003. It also calls on Nissan
Diesel to sell 1,000 Renault-made small trucks in Japan a
year and 1,800 proprietary small trucks in Africa and other
regions a year via Renault's sales channel.

To cut procurement costs by 20%, Nissan Diesel will jointly
procure parts with Nissan Motor and Renault. Through joint
operations with Renault, Nissan Diesel hopes to boost
annual sales by 22 billion yen and annual profit by 6
billion yen by fiscal 2004.

Nissan Diesel expects sales of 500 billion yen in fiscal
2004, up 100 billion yen from fiscal 1999. Group
liabilities -- excluding 150 billion yen related to sales
finance -- are projected to fall to 250 billion yen at the
end of fiscal 2004, down from 330 billion yen at the end of
fiscal 1999.

The company revised down its earnings for fiscal 1999. It
now expects a net loss of 44 billion yen, compared with an
original forecast of 21 billion yen in red ink. Pretax loss
is estimated at 5 billion yen, against original
expectations of 1 billion yen in profit. The worse-than-
expected earnings are due to a stalled recovery in domestic
truck sales. (Nikkei  28-April-2000)

TOSHIBA CORP.: Reports 28B Yen group net loss in FY99
Toshiba Corp. (6502) said Friday it suffered a consolidated
net loss of 28.00 billion yen for the fiscal year ended
March 31, deeper than the year-earlier loss of 13.90
billion yen.

Toshiba said its consolidated sales grew 8.5% to 5.749
trillion yen, marking the first on-year gain in three
fiscal years.  The company said sales of such products as
semiconductors, liquid crystal products and mobile
communication goods fared well in the latest reporting

In addition, inclusion of the Toshiba Tec Corp. group in
its group results helped underpin on-year sales gain.
Operating profit grew more than threefold to 100.97 billion
yen, exceeding the year-earlier levels for the first time
in four years.

The company attributed the operating profit gains to sales
of personal computers and mobile communications goods.
Stability in semiconductor prices from the second half
contributed to the rapid on-year growth.  But it suffered a
group pretax loss of 44.84 billion yen, compared with the
year-earlier profit of 11.22 billion yen.

The company said it reported 106.39 billion yen in non-
operating expenses linked to last year's settlement of a
U.S. class-action lawsuit over the floppy disk controllers
used in its notebook computers.  In addition, Toshiba
booked other costs related to restructuring of
semiconductor and household electric appliance operations
in the non-operating category.  (Nikkei  28-April-2000)


DAEWOO GROUP: Gov't to speed up foreign debt purchase
The government has decided to accelerate its purchase of
Daewoo debts from foreign creditors as workout programs for
major subsidiaries of the group have been making virtually
no headway due to strong opposition to the workouts by
minor shareholders.

The Korea Asset Management Corp. (KAMCO) and local creditor
banks plan to send a delegation overseas next week to
negotiate the purchase of the debts at a 60-% discount. A
high-ranking official at the Financial Supervisory
Commission (FSC) said Monday that local creditor banks of
Daewoo would jointly set up a company in Singapore for the
purpose of purchasing Daewoo's overseas debts.

Sources say the government anticipates that the settlement
of Daewoo's debt with its foreign creditors will expedite
the workout programs at the entire group.  (Digital
ChosunIlbo  02-May-2000)

DAEWOO HEAVY INDUS.: Minor shareholders get workout stop
The workout plans for major Daewoo subsidiaries have hit a
major bump, as the courts have once again ruled in favor of
minor shareholders' request for an injunction on the
implementation of resolutions made at annual general
meetings (AGMs) held in March.

The Seoul District Court upheld Friday the claims of the
minor shareholders of Daewoo Heavy Industries (DHI), who
had filed for an injunction on the workout plans for the
firm, which they say go against their interests.  The
workouts at DHI will be postponed for about five months as
a result.

The court had also earlier come down on the side of minor
shareholders of Daewoo Electronics, who made a similar
filing, citing irregularities during the AGM in which the
resolution for the workout was approved.  Some officials at
the Ministry of Finance and Economy and the Financial
Supervisory Commission have protested, saying that the
stubbornness of minor shareholders has been undermining the
workout processes of troubled firms.

They say the government will have to resort to other
measures to apply the workout programs, including pre-
packaged bankruptcies.  One representative of DHI's minor
shareholders said Friday that a court injunction had been
filed as minor shareholders feel the 73% capital reduction
ratio for minor shareholders being demanded by the firm's
creditors is unreasonable. He said that they would drop
court action and positive support the workout programs if
creditors lowered the ratio to 45%.  (Digital Chosun  01-

HYUNDAI ENG.& CONST.: Samsung Life calls loan due early
At the same time that Hyundai has been eyeing Samsung as a
possible culprit in the outbreak of its rumor crisis, key
group subsidiary Hyundai Engineering and Construction (HEC)
has locked horns with Samsung Life Insurance over an
earlier business deal.

A senior HEC official said Friday that Samsung Life had
demanded over the phone that the Hyundai flagship repay a
W50-billion loan installment not due until this November by
May 9. According to the Hyundai official, Samsung Life
claimed that it was requesting early repayment due to
worries over rumors of a liquidity crisis at Hyundai.
Officials at Samsung Life said the request was not
abnormal, as the W50-billion loan was due to mature by the
end of May and the request for repayment had been made just
a month prior to the maturity date.

HEC said, however, that it owes a total of W132.5 billion
in total, with a W50-billion payment due in July, W32.5
billion due in September and another W50 billion in
November. The Hyundai official added that Samsung Life had
definitely called in the W50 billion installment due in
November.  (Digital ChosunIlbo  28-April-2000)

HYUNDAI GROUP: Gov't bailout ruled out
The financial authority yesterday ruled out a Hyundai Group
affiliate's request for 2 trillion won in bailout loans at
overnight interbank rates.

Instead, the government said Hyundai Investment Trust &
Securities should apply for the loans at the going market
rates.  Lee Yong-keun, chairman of the Financial
Supervisory Commission, said during a meeting with
reporters that the government would not give such a
privilege to the Hyundai affiliate.

Following the liquidity shortfall of its investment trust
unit, Hyundai has made a demand that the government give a
2 trillion won rescue loan at cheap price.  The financial
authority earlier offered a rescue loan to the Hyundai
Investment Trust in return for its takeover of the bankrupt
Hannam Investment Trust.

Lee said, however, there was no convincing reason this time
to give any incentive to the Hyundai affiliate.  With
regard to Hyundai's claim that the government was partly
responsible for the crisis as it forced a merger between
Hyundai Investment Trust and bankrupt Hannam Investment
Trust, another senior FSC official rejected the call.
He said the takeover was voluntary and was to satisfy
Hyundai's wish for expansion into the trust business.

The official added that the government had already shared
the responsibility by endorsing 2 trillion won in emergency
loans at cheap overnight rates immediately following the
merger.  (Korea Herald  01-May-2000)

HYUNDAI INVESTMENT TRUST: Bad assets exceed W2 Trillion
The amount of bad assets at Hyundai Investment Trust (HIT)
has turned out to be larger than those of Daehan Investment
trust and Korea Investment Trust combined.

According to figures released by HIT Friday, on top of
W1.19 trillion in bad assets, the firm has also completely
depleted its W815.2 billion in capital as of the end of
March, which means that the firm has bled more than W2
trillion in funds. This latter figure is virtually the same
as the combined total of bad assets at the other two
investment trust firms, with W1.2 trillion in bad assets at
Korea Investment trust and W1 trillion in bad assets at

The financial status of the other two, however, is much
stronger, as both were able to write off their bad trust
assets this year. HIT also has W3.2 trillion in short-term
loans borrowed from customer deposits, which is twice as
much as Korea Investment Trust and 1 trillion more than at

The especially poor financial status of Hyundai Investment
Trust is attributable to its government-ordered takeover of
non-viable trust companies back in 1997 and 1998. One
official at HIT said his firm had taken over a total of W1
billion in short-term debt from such firms and had also had
to pay out W3.1 trillion to acquire them.

Weak management has also exacerbated the problems at HIT,
which found itself heavily exposed to Daewoo bonds and lost
about W800 after the troubled conglomerate went down last
summer. (Digital Chosun  28-April-2000)

HYUNDAI INVEST.TRUST: Family contribution,bailout near
The government and the Hyundai Group yesterday appeared to
be nearing a compromise on how to clean up investment
losses and managerial messes at the troubled Hyundai
Investment Trust & Securities.

Backing down from its demand for outright private wealth
contribution by the family of Hyundai founder Chung Ju-
yung, the watchdog Financial Supervisory Commission said
that the Hyundai Investment Trust crisis should be settled
through equal loss sharing among the Chung family and key
Hyundai Group companies without infusions of public money.

"Two largest shareholders in Hyundai Investment Trust -
Hyundai Securities and Hyundai Electronics Industries - and
the Chung family will equally finance capital increases,"
said FSC Chairman Lee Yong-keun during a briefing on the
issue to President Kim Dae-jung. Lee also said the Hyundai
Group will seek to attract foreign capital and issue
subordinated bonds.

"Basically, the government will not extend public money to
ailing private firms, like Hyundai Investment Trust. If
necessary, however, some emergency financing could be
offered to the Hyundai financial unit at the market
interest rate, to stave off any controversy over special
favors to a specific chaebol," Lee said.

The government will ensure that the Hyundai Group solve
liquidity problems at its investment trust and securities
unit on its own without government financial aid, Lee said.
Hyundai subsidiaries and family members of Chung Ju-yung,
founder and honorary chairman of the group, should
participate in rights offerings by the trust and securities
unit, Lee said.

However, the FSC head said that Korea Securities Financing
Co. will provide loans to Hyundai Investment Trust and
Securities at the market interest rate, not at a
preferential rate.  The Ministry of Finance and Economy
also said that the government will not extend financial
assistance to Hyundai's investment trust and securities
unit to make up for its losses.

The Hyundai Group, accepting the government-recommended
self-help measures, said that honorary chairman Chung's
family will be ready to take over all unsubscribed shares
occurring in the process of capital increases at Hyundai
Investment Trust, as an indirect means of personal wealth

According to Hyundai sources, about 200 billion won ($181.8
million) of an estimated 1.2 trillion won to 1.5 trillion
won shortfall in the net capital of Hyundai Investment will
be filled by foreign capital. The remaining sum will be
filled by subordinated bonds issued by key Hyundai
companies and capital increases by Hyundai Securities and
Hyundai Electronics Industries.

Any unsubscribed shares, if occurred as a result of the
capital increase, will be absorbed by the Chung family, the
sources said.  Hyundai plans to announce the self-rescue
measures today at the earliest after holding further
consultations with government officials.

Huge investment losses at Hyundai Investment, combined with
rapidly declining investor disappointment over Hyundai's
family-controlled governance structure and lack of
managerial transparency, have resulted in the crash in the
share prices of Hyundai companies, threatening to embroil
local financial sector in another crisis.

Aware of the worsening financial market circumstances,
Hyundai and the government may have swiftly attempted to
compromise on the solutions by yielding one step each,
analysts say.  (Korea Herald  03-May-2000)

HYUNDAI INVEST.TRUST: To get rehab plan this week
The Hyundai Group will announce a final restructuring plan
for troubled Hyundai Investment Trust and Securities

The conglomerate's restructuring committee will discuss a
final outline before making the announcement, a senior
group executive said Monday.  The group is reportedly
considering assistance to Hyundai Investment Trust
through shares of the company's main stockholders Hyundai
Electronic Industries (KSE: 00660) and Hyundai Securities

Group founder Chung Ju-yung and his son and group chairman
Chung Mong-hun are the largest shareholders in the two
companies. But Hyundai will maintain its earlier position
that the Chung family need not contribute their personal
wealth to bail out the investment trust unit.

"There are many ways other than donation from the owner
family to clean up Hyundai Investment. We have other
measures," the executive said.

The Chung family has already put up 500 billion won (US$
450 million) for the company's recapitalization in January
and their assets in non-listed companies and real estate
are too small to help Hyundai Investment, he said.

"Hyundai Investment will help itself first and the group
will give full support," he said.

Hyundai Investment Trust said Friday that it will offer a
portion of its stock holdings by its largest shareholder
Hyundai Electronics to the public at below-market prices.
It promised to raise capital to 2.7 trillion won by 2003.

Financial Supervisory Commission (FSC) Chairman Lee Yong-
keun rejected the proposal, saying it is far too
unsatisfactory to meet market expectations.  He demanded a
more stringent plan that includes greater contribution from
affiliates and main shareholders.  (Asia Pulse  01-March-

HYUNDAI INVEST.TRUST: Capital increase proposed to save
The government is reportedly considering having major
shareholders of Hyundai Investment Trust and Securities
(HITC), including Hyundai Electronics and Hyundai
Securities, increase their capital through the issuance of
new shares to help HITC overcome its liquidity crisis,

Hyundai founder and honorary chair Chung Ju-yung and his
family to receive any forfeited shares resulting from the
issuance. A high-ranking government official said Sunday
that the government has come up with this new proposal to
avoid having the Chung clan make a direct private
contribution of funds to save the ailing investment trust

The government has been making efforts to avoid the
appearance of placing undue pressure on the Chung family to
channel private assets into HITC to restore investor
confidence in the whole group. (Digital Chosun  01-May-


TIME dotCOM: Renong boss says creditors paid by Aug.
Tan Sri Halim Saad, boss of the Renong group, has made a
clear stand that Time Engineering Bhd will not give up
control of Time dotCom Bhd and that creditors of Time will
be paid in full by July or August.

"I am not a director of Time but nobody should expect to
short-change Time," Halim told Star Business.
Halim, executive chairman of Renong and managing director
of Time dotCom, said the Time board would decide what was
best for the company.

Asked whether he was pre-empting the Time board decision on
Sapura group's bid for Time dotCom, Halim said: "No. I am
merely stating Renong's position with regard to the future
strategic plans for Time."

Renong holds 46.8% of the equity in Time, which wholly owns
Time dotCom. Time dotCom is considered the jewel in the
crown of Time, which houses all the group's telecoms
assets.  These assets include a 5,200km fibre optic network
controlled by TT dotCom Sdn Bhd, a cellular network (Time
Wireless Sdn Bhd), payphone operations (Time Reach Sdn
Bhd), satellite and microwave businesses (TimeSat Sdn Bhd)
and an Internet service and content provider (TT Online Sdn

Halim was responding to queries from Star Business in the
wake of Sapura group's last-minute proposal to take control
of Time dotCom.  Under the proposal, the Sapura group would
end up with 40% of Time dotCom, making it the single
largest shareholder of the company prior to its listing on
the KLSE.

Time would see its stake in Time dotCom reduced from 55% to
21%, and Time's creditors would end up with 38%. Sapura is
a major creditor of Time group.  A Sapura senior executive
who declined to be named had said the group's proposal was
superior to that of Time's own scheme.

Under Time's scheme, every creditor would be paid within 30
days of the listing of Time dotCom, and Time would end up
with 55% equity in Time dotCom.

"We (Renong shareholders in Time) will not vote in favour
of losing control of Time dotCom. We are not giving up
control of Time dotCom. It is not for sale," Halim said.
"While we will invite a strategic partner based on its
financial strength, expertise and experience to move ahead,
that does not mean we will give up control of Time dotCom,"
he added.

Halim said telecommunications would be a core business of
the Renong group.  He said if there were any political
complications, the creditors should leave the matter to the
board and management of Time.  In any case, the company
would need all the necessary approvals from the relevant
authorities later.

"We will pay all creditors in full, plus interest and in
cash, what is due to them ... nothing more and nothing less
and this can be done as early as July or August this year,"
Halim said.  "If the creditors want shares in Time dotCom
in exchange, this is possible. But there is no need for any
creditor to propose a scheme where they get the upside.
That is more than what is due to them," he added.

Halim said the management had managed to add value to Time
from "somewhat fire-sale bid prices" of RM1.6bil in 1998 to
RM8.3bil.  He pointed out that the figure of RM8.3bil was
determined by independent consultants appointed by the
Corporate Debt Restructuring Committee (CDRC) during the
past 12 months.

The Sapura group currently has a 25% stake each in Time
Reach and Time Wireless. Four years ago, Sapura had sold
75% each in both these companies to Time to concentrate on
telecoms equipment rather than be a service provider.

An analyst observed: "Sapura did not see the value of the
business then and that is why they sold those stakes. But
they saw the attraction after the independent valuers put a
value of RM8.3bil on the company. A lot of hard work has
been put in by the Time management.  Why didn't Sapura make
such an offer 18 months ago? Why did the offer come less
than 24 hours before the court hearing of the aplication to
extend Time's restraining order on April 28?"

Last Friday, Time was granted a a three-month extension of
its court protection from its creditors under Section 176
of the Companies Act.  The analyst noted that to move
ahead, Time had come up with a scheme which involved the
formation of a strategic alliance and listing of its
subsidiaries to help clear the bulk of the group's
borrowings of RM5bil alongside its expansion programme.

In the rapidly changing telecoms business, a strong
strategic partner with financial muscle and high technology
was crucial, the analyst said.  Even global players were
forming alliances to move ahead, he said. With the
Singapore Telecommunications Ltd offer, Time would get a
much needed jumpstart, he added.  (Star Online  02-May-


PHILIPPINE NAT.BANK: Only experienced operators in auction
Only financial institutions or a consortium of financial
and non-financial institutions can participate in the May
26 auction of 80% of Philippine National Bank (PNB), the
Department of Finance (DoF) said.

The rule is meant to "ensure the efficient management of
PNB once privatized," Finance Secretary Jose T. Pardo last
week said.

"We prefer a bank or a financial institution (to bid for
PNB) because we are sure PNB will be managed efficiently
since the new owners would know how to manage a bank," he
told BusinessWorld.  In the DoF-prepared bidding guidelines
for the PNB sale, the agency said, "Only financial
institutions may enter bids (for PNB)."

But consortia composed of financial and non-financial
institutions may also enter bids "provided that the total
participation of each member in the consortia does not
exceed the levels allowed by laws, rules, regulations and
circulars," the guidelines state.

Also to be considered in the pre-qualification stage are
the bidder's professional reputation, management experience
and financial strength, the DoF said.

"Only institutions or consortia whose members enjoy a sound
professional reputation will be considered fit-and-proper
investors for the divestment," according to the bidding
rules.  It added, "All bankers must be able to demonstrate
experience in running major banking operations."

But the DoF will not welcome parties that are related to
the government or to PNB majority shareholder Lucio C. Tan.
"None of the vendors nor their related interests shall be
allowed to participate in the bid," the guidelines state.
The Finance department started accepting "expressions of
interest" from potential buyers of PNB last Friday.
Prequalification bids will be accepted until May 15.

Up for grabs are the PNB Retirement Fund, Inc.'s 3.5% stake
in the bank along with the combined 75% stake of the
government and Mr. Tan.  Already, three interested parties
have approached the DoF after the bidding was opened last
Thursday, Mr. Pardo said.

"(But) we do not know the identities of the three (firms).
They just sent representatives. They will disclose
(identities) at an appropriate time," he said.

Mr. Pardo said interested buyers are required to deposit
200,000 Philippine pesos (PhP) (US$4,800 at PhP41.279:US$1)
when they apply for prequalification.  Prequalified bidders
will be required to give a deposit equivalent to 10% of
their bid. They will be allowed to conduct a due diligence
audit on PNB from May 5 to 25. The sale is scheduled for
May 26.

The DoF is under pressure to complete the privatization of
PNB by June 10 to fulfill commitments with the World Bank
and the International Monetary Fund.  The government wants
to attract several investors for PNB as it is only allowed
to offer the 80% block once, under its agreement with Mr.

If the sale fails, the two parties are not bound to do
another round of joint sale through a public bidding.
Under the deal, Mr. Tan will dispose his 46% stake in the
bank together with the government's 30.39% stake by May 15.
The DoF expects the bigger block to lure more investors.
Already, the government is mulling "other options" in case
the bidding fails. Mr. Pardo said the DoF plans to
negotiate with the highest bidder if bids will fall below
the floor price.

"If all bids fall below floor price, we would have to
directly negotiate with the highest bidder if they should
be interested. That is what we are trying to put together
given the uniqueness of the transaction," he said in an
earlier interview.

But the DoF and Mr. Tan are yet to agree on the floor price
of PNB shares since the two parties are still waiting for a
parallel audit of the bank being done by SGV & Co. and
Punongbayan and Araullo.  (Business World  02-May-2000)

PHILIPPINE TEL.& TEL.: Approves creditor's rehab plan
Philippines Telephone and Telegraph (PT&T) has approved the
indicative terms and conditions of the proposed debt
restructuring program presented by its creditors' steering

PT&T is a provider of data communications facilities.
The terms and conditions will be used as bases in obtaining
individual internal credit board approvals. The creditors
and Retelcom, PT&Ts parent company, have agreed that it is
in the best interest of the company to identify a strategic
partner investor who can infuse capital and management
expertise directly into PT&T.

The conditions provide for repayment of the loans over a
10-year period, inclusive of grace periods given for both
interest and principal.  The debt program, which covers
both pesos and dollar facilities, also calls for conversion
of a portion of the debt into PT&T equity.  All of the
creditors will be secured by a participation in the
company's mortgage trust indenture. The creditors also
agreed to release the Surety issued by Retelcom.

Expected to commence soon is the creditor's legal due
diligence and work on the final draft of the restructuring
agreements.  Upon completion of the definitive agreements,
PT&T will obtain the final approval of its board and
shareholders. The company recently launched its advanced
frame relay service to provide corporate customers with
reliable and cost-effective data communications
solutions.  (Asia Pulse  28-April-2000)

URBAN BANK: DOJ probe urged into `holiday'
Malaca¤ang wants the Department of Justice (DoJ) to
investigate allegations of wrongdoing which led to the
temporary closure of Urban Bank.

Press Secretary Ricardo V. Puno, Jr. yesterday said
President Estrada directed Justice Secretary Artemio G.
Tuquero to form a task group of DoJ prosecutors,
researchers, as well as officers of the Bangko Sentral
(Central Bank) and the Department of Finance (DoF) to look
into the matter.

"The President issued a memorandum to the fully
complete an investigation into allegations with regard to
Urban Bank. There have been allegations of wrongdoing and
of certain transactions that need to be looked into," Mr.
Puno told a press briefing.

BusinessWorld learned that last week's speedy take-over by
the Philippine Deposit Insurance Corporation (PDIC) of
Urban Bank was meant to protect the bank's records from
alteration, theft or destruction.  About 30 PDIC personnel
-- two examiners per department -- were detailed to the
Urban Bank's main office last Wednesday to "protect" bank

"We learned from our past experiences where we took our
sweet time to take over the bank," said one PDIC official,
whoe requested anonymity. "By the time we got there, the
records were already tampered (with)."

Of special concern for PDIC is Urban Bank's deposit
records, the "integrity" of which would determine the speed
by which insured deposits of its clients could be serviced.
"We wanted to make sure that the large accounts will not be
split up like in past cases," the source stressed.

The official said that in past bank failures, some
"influential and well-connected" accounts were warned ahead
of the bank's impending closure.  Account holders who were
unable to withdraw their funds were "allowed" by management
to break down their deposits into several "insurable
amounts" of 100,000 Philippine pesos ($2,423 at
PhP41.279=$1) or less.

"When this happens, the small depositors suffer," he said.
Mr. Puno said Mr. Estrada wants the DoJ-led group to submit
periodic reports to the Office of the President.  "The
President also directed reports should be provided to his
office on the results of the investigation. And he directed
the investigation to commence not later than two weeks," he

The central bank is already set to conduct its own
investigation into allegations that Urban Bank withheld
vital information regarding its financial health.

There were, in fact, reports that some of Urban Bank
executives, shareholders and "well-connected" friends were
able to close their accounts before the bank closed last
week.  Bangko Sentral (Central Bank) Gov. Rafael B.
Buenaventura said the central bank is verifying these

"I heard there were a lot of text messages about who
managed to get their deposits out before the closure. For
the time being, let me tell you we are still in the process
of verifying. So we really don't know whether these
allegations are true or not," he told a press briefing in

Former President Ramos, Urban Bank's chairman emeritus, was
among those rumored to have been able to withdraw money a
few days before the bank closed.  Mr. Ramos has already
denied this, and his spokesman, Jesus C. Dureza, said the
ex-President was even one of those "adversely" affected by
the closure. Mr. Buenaventura stressed Urban Bank's
problems are not related to politics.

"I don't know about any politics...But clearly, as far as
the political landscape, this has nothing to do with it.
This is strictly a bank that decided (it was) illiquid and
therefore could not meet the withdrawals of depositors. And
(it) declared a holiday. Subsequently, the Philippine
Deposit Insurance Corp. and (Bangko Sentral) took
order to secure the assets and the records of the bank," he

On the other hand, the Bankers' Association of the
Philippines (BAP) is ready to impose sanctions on banks
which start rumors against competitors.  Mr. Buenaventura
said rumor mongers created panic among depositors, causing
them to withdraw money from several commercial banks like
International Exchange Bank.  He said the BAP had already
instructed all its bank members not to start any rumors
that would be detrimental to their competitors.

"This (rumor mongering) would affect them sooner or later.
This is not good for the economy. So they agreed, they will
impose sanctions on employees and officers of their
organizations who will start rumors. We told them that if
they have proof of it, and get affidavits, then we will
impose sanctions on those banks if they do not impose
sanctions on themselves," Mr. Buenaventura said.

Meanwhile, the PDIC official said the "decisive take-over"
of Urban Bank prevented complications.  Last week, however,
PDIC president Norberto C. Nazareno said that since Urban
Bank's deposit records are fully computerized and
centralized, its depositors will be partially serviced
beginning today.

"If things worked well, we hope to be able pay the entire
PhP100,000 ($2,423) by Friday," he said.  Mr. Nazareno will
also be asking legislators to amend the PDIC law to
increase the maximum insurable deposit value to "at least
PhP200,000 ($4,845)."

He cited the case of the US Federal Deposit Insurance Corp.
(FDIC) which insures up to $100,000 worth deposits.
"At that level, the FDIC covers 80% of the entire deposits
in the US," he said. "At present insurance levels on the
other hand, PDIC covers only 20% of total deposit accounts
in the country."

In a related development, the Social Security System (SSS)
is exploring the possibility of swapping its shares in
Urban Bank, in exchange for the bank's properties in Fort
Bonifacio.  SSS president Carlos A. Arellano yesterday said
the state pension fund is looking at various ways to save
its investment in the troubled bank.

"As a matter of fact, we've made arrangements with the bank
to swap the shares that we have into property that is also
within the premises (of what) we had already obtained in
the Bonifacio area. So that's still an ongoing thing.
Whether that's executed or not under the present setup is
something that we have to pursue, because that changes the
perception now on our investments from an equity position
to land holdings," he told reporters after the Labor Day
celebrations in Malaca¤ang.

Mr. Arellano said the deal between Urban Bank and SSS has
already been approved by both, but unfortunately, the bank
suffered liquidity problems last week.  It is now be up to
the Bangko Sentral, the Securities and Exchange Commission
and other government regulatory bodies to determine if this
arrangement is still possible, he said.

Finance Secretary Jose T. Pardo, noting the Finance
department has been closely monitoring the investments of
the government financial institutions, said it is studying
whether the arrangement could still pursued.

"(The SSS) earlier proposed to acquire Urban Bank's real
estate property in Bonifacio in exchange for shares and for
a purchase amount of PhP500 million ($12.11 million). That
was accepted, but was overtaken by events" he said in a
press briefing in Malaca¤ang.

However, Bangko Sentral Gov. Rafael B. Buenaventura said
once the Urban Bank's assets are liquidated, shareholders
like SSS would be among the last to be paid.

"The creditors would be paid first, then the depositors and
investors. The shareholders would be the last...That will
take a little bit of time because from what we understand,
the investments of its finance company is 75% is the form
of real estate, which was their main problem. They were not
liquid," Mr. Buenaventura said at the same briefing.

Mr. Arellano downplayed what has been described as the SSS'
"failed investment" in the Urban Bank, saying it is the
smallest investment in a bank issue. He claimed the SSS'
investment in the bank is only "a little over PhP100
million ($2.42 million)," not PhP171 million ($4.14
million) as earlier reported.

He maintained the SSS had already gained from its shares in
Urban Bank. In an earlier statement, SSS claimed it earned
PhP15.2 million ($0.368 million) from its shares.

"When you look at the investment portfolio, you just don't
look at one stock. Out of 100 stocks, maybe you have one
failure or two failures. But the important thing is, on the
overall, what have you made out of portfolio. If you look
at the experience of SSS, especially during the last two
years under my term, the performance of investments is very
exceptional," he said.  (Business World  02-May-2000)

URBANCORP SECURITIES: Declares voluntary suspension
Urban Bank Inc unit Urbancorp Securities Inc has declared a
voluntary suspension following the closure of the parent
firm last Wednesday.  The compliance and surveillance group
"checked on UrbanSec and UrbanSec has agreed to go on
voluntary suspension," he said.  (AFX News Limited  02-May-

WESTMONT INVEST.CORP.: Facing loss of license,registration
Westmont Investment Corp. (Wincorp), the investment house
formed by former finance secretary Edgardo Espiritu, stands
to lose its license and certificate of registration if it
fails to come up with a satisfactory explanation about its
alleged violation of securities rules and laws.

Wincorp was found to have violated rules on short-term
commercial papers for failing to register with the
Securities and Exchange Commission (SEC) the CPs issued to
about 2,200 investors, mostly Binondo and Cebu-based
Chinese Filipino individuals. Under the rules, debt
instruments are exempt from registration if they are issued
to not more than 10 lenders and the total outstanding
amount of such securities does not exceed P5 million.

An audit by the Brokers and Exchanges Department, an SEC
unit that oversees the operations of investments houses,
showed that Wincorp had issued an average of P7- billion
worth of CPs per month and the debt instruments were not
held by Wincorp up to their maturity.

The rules provide that all debt instruments shall be held
on to maturity and shall neither be negotiated nor assigned
to any one other than the central bank and the Development
Bank of the Philippines.

An SEC official said it would ask Wincorp to show cause why
its license should not be revoked for allegedly violating
rules on short-term CPs.  The BED has turned over its
findings to the Prosecution and Enforcement Department, the
SEC's investigation arm, for possible filing of criminal
charges against the individuals responsible for the

The SEC official said whoever was responsible for issuing
the confirmation advice to investors or funders of Wincorp
should be held accountable for the violations spotted.
"Although Wincorp is making it appear that it is only
acting in behalf of the borrowers and lenders, this is
negated by the fact that it is depositing in its own
account the proceeds of the transactions. They can even
negotiate the securities even without the consent or advice
of the funder or borrower as the case may be," the SEC
official said.

The BED has asked that a cease and desist order be
immediately issued to prevent Wincorp from operating and
making disbursements of its corporate funds without prior
approval from the SEC. The CDO is also to stop Wincorp from
disposing or transferring any of its properties for the
benefit of investors.

The PED, meanwhile, is set to issue an order directing
Wincorp to submit its comments on the letter complaint
filed by a group of investors accusing the company of
allegedly violating rules in relation to the Revised Penal

A group of investors last week had asked the PED to
investigate the past and present officers, stockholders and
employees of Westmont Bank (now known as the United
Overseas Bank) and Wincorp for probable violations of the
Revised Securities Act and other rules in relation to the
Revised Penal Code.

In their letter complaint to the SEC, the investors claimed
that most of their hard-earned money went into the hands of
the past and present officers and directors of Westmont
Bank and Wincorp.  The investors said they were induced to
divert funds previously deposited with Westmont Bank and
invested in securities offered by Wincorp in the form of a
so-called confirmation advice.

In the "confirmation advice," investors said they were made
to appear that they invested their money in previously
undisclosed third party "borrowers" and that Wincorp merely
"brokered" the said "no recourse" transactions.  The
investors said they were made to believe that they were
investing in securities guaranteed and/or underwritten by
Westmont Bank-UOB and Wincorp as they were never shown any
prospectus, financial statement or debt instrument issued
by these alleged "borrowers."

"After a thorough background check, these alleged
"borrowers" eventually turned out to be merely fronts of
some of the past and present beneficial owners,
stockholders, directors and officers of Westmont Bank and
Wincorp," the investors said.

Among the other possible violations that are being looked
into is the alleged illegal and hidden credit line between
Westmont Bank and Wincorp. The extension of the line was
reportedly in violation of prudential limits on credit to
directors, officers, shareholders and related interests

At least 20 companies linked with Espiritu and his business
associates were earlier identified as the major borrowers
of funds pooled by Wincorp. Most of the borrowers are also
shareholders of Publicly-listed Unioil Resources and
Holdings Co. Inc., which owns 100 percent of Wincorp.
Earlier reports said Power Merge, headed by Jardine Fleming
Exchange Capital managing director Luis Juan Virata, was
Wincorp's biggest borrower with a loan obligation of P2.5

The SEC is also looking into a complaint filed by Manuel
Tan, who owns roughly 25 percent of Wincorp, accusing the
company's officials of falsifying corporate documents and
misrepresenting facts.  Tan said Wincorp made it appear
that Pearlbank Securities, another company he owned, was a
borrower in several debt instruments issued by Wincorp. He
stressed that he had no outstanding obligations with
Wincorp or any of the company's investors. He was earlier
identified by Wincorp as one of its borrowers with a loan
obligation of P274 million.

Wincorp said the failure of certain borrowers to pay back
the loans it has extended to them hobbled its ability to
meet maturing obligations including interest. The interest
due was instead capitalized or made part of the principal,
thus giving Wincorp no income at all to service maturing
placements of over 2,000 investors.  (Manila Times  02-May-


FRASER & NEAVE: Gives up on loss-making investment
Fraser & Neave has finally closed its chapter on Haw Par
Villa which, according to a Singapore Business Times
report, has turned out to be one of the most expensive
mistakes for the group.

The report said International Theme Parks (PTP) had opted
out of its 40-year lease agreement on the attraction--a
move that may mark the end of a long-drawn agony for ITP's
joint owners F&N and Times Publishing.  ITP, which has
suffered a decade of losses after investing more than
S$80mil in the Chinese mythology theme park, will continue
to manage it for the time being.

In the interim, the Singapore Tourism Board (STB) said, it
would look for new operators to revitalise the theme park.
ITP won the tender to manage the park in 1988 and re-opened
it four years later. It had expected to recoup its
investment in five to seven years; instead, losses mounted.
Even a S6mil plan in 1995 to revamp the park's attractions
and a drastic slash in entry charges could not avert its
downfall. By 1998, the park had chalked up S$31.5mil in

ITP sold back the remainder of its 34-year lease to the STB
on March 31 but the price that the 9.8 hectare park fetched
was not disclosed.  (Star Online  02-May-2000)


DBS THAI DANU BANK : Announces recapitalization
DBS Thai Danu Bank (DTDB) yesterday announced a
recapitalisation plan of Bt13.5 billion via right issue and
private placement, a move that aims to get the bank back on
track once and for all.

The massive recapitalisation will fund the bank's five-year
business-expansion plan and deal aggressively with its
Bt39.8-billion non-performing loan (NPL) problem, bank
president Pornsanong Tuchinda told a press conference.

"One goal of this exercise is to put a large part of our
NPL problem behind us, get back to business, and seek
growth while competitors continue to grapple with their own
NPL issues," Pornsanong said.  "The only way to do this is
to continue to act boldly, and this is what our plan
provides for. It is the right way to do it, and given our
significant progress to date, now is the right time to do

Pornsanong said he was confident that with strong financial
support DTDB would return to profitability this year and in
the next three or four years its market share would be
doubled.  The plan requires final approval from bank
shareholders, scheduled to meet on May 26. If shareholders
give the plan the green light, recapitalisation should be
completed by the end of June.

Banking analysts welcomed the move, but they said the
amount of recapitalisation was much higher than their
previous expectations of Bt5 billion to Bt9 billion.

"This is a very decisive move for DTDB, and the new capital
should be adequate to help the bank expand its future
businesses. The announcement also comes at a perfect time
and is a good policy to enable the bank at the forefront,"
Kavee Chukitkasem, banking analyst at Capital Nomura
Securities Plc said.

An analyst at a local brokerage house was surprised by the
bank's move but said this would certainly strengthen its
financial positions. After the new capital hike, the bank
should be ready to move full speed ahead with its business
expansion, the analyst said.  Although such a move
surpassed analysts' expectations, it was necessary for the
bank's long-term business expansion, said Chong Kie Cheong,
executive chairman of DTDB representing the Singapore-based
DBS group.

"We want to make sure that the bank is financially strong
and is ready to move ahead with its aggressive business-
expansion plan. The Thai market is the most important
market for us," he said.

Under the plan, new common shares worth Bt11 billion will
be sold to existing shareholders at a ratio of one old
share for one new share at Bt10 apiece. Every new share
will come with one free warrant. The warrant will have a
maturity of five years, but subscribers will be allowed to
exercise their warrants after three years. Each warrant is
worth Bt10. DTDB's share price yesterday remained unchanged
at Bt13.25.

The remaining Bt2.5 billion of the recapitalisation funds
will be used for private placement to new or existing
investors.  Pornsanong said the DBS group, which owns a
majority stake in DTDB, would subscribe to its full rights
and some of the private placement shares to maintain its
52-per-cent stake in the bank. The Singapore bank will
subscribe to the entire new issue in the event the issue is
not fully subscribed.

If the new shares are not sold out, DBS officials confirmed
that it would buy capital securities similar to those
issued last year.  Under the NPL resolution plan, the bank
president said, DTDB intends to sell a portion of its
problem loans but it will also consider alternatives,
including increasing provisions beyond regulatory
requirements and writing off NPLs.

The bank, however, does not plan to set up an asset-
management company to manage bad debts like other banks

"The bank intends to package and sell a portion of its NPLs
at a realistic market value," Pornsanong said.  "We have a
problem here. But we are recognising it now, paying for it
now, preparing for the future and putting this distraction
behind us. We are dealing with our NPL situation just as
forthrightly as we possibly can. We believe this is what
our investors and the market want Thai banks to do."

The bank aims to reduce NPLs by Bt14.16 billion by year-
end. After the planned recapitalisation, DTDB's capital-
adequacy ratio by Bank for International Settlements
standards will rise to 21.5 per cent of total risk-weighted
assets from the current ratio of 12.22 per cent, according
to Pornsanong, and its capital base will be strong, at Bt20

He said the bank needed an additional Bt4.2 billion to meet
the full provision requirement. The bank has so far set
aside 80 per cent of its goal against bad loans.
DTDB has announced a Bt252.6-million improvement in
operating income for the first quarter compared to the
previous year's results. (The Nation  29-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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