TCRAP_Public/000509.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

             Tuesday, May 9, 2000, Vol. 3, No. 90


* A U S T R A L I A *

AVONWOOD HOMES: Liquidator to meet affected customers
BHP: HBI plant reduced to zero value
BHP: Has second plant with zero book value
BHP: To close Ok Tedi mine
GOLDEN WEST: To sell US refineries
MUSEUM OF CONTEMPORARY ART: Sartor sweetener may save it
WATER WHEEL HOLDINGS: Creditors report may trigger probe  

* C H I N A  &  H O N G  K O N G *

ART FAIR COMPANY LTD: Facing winding up petition
CREATIVE RISE LTD: Facing winding up petition
HAPPY FOOK ENTERPRISES LTD: Facing winding up petition
HONG KONG AUCTIONEERS & ESTATE: Facing winding up petition
JADE KAN INT'L DEVEL.LTD: Facing winding up petition
MANSION EASY LTD: Facing winding up petition
PANTECH COMMUNICATIONS LTD: Facing winding up petition
SHUN HING INT'L DEVEL.LTD: Facing winding up petition
SMART HERO INT'L CO.LTD.: Facing winding up petition

* J A P A N *

DAIWA CONSTRUCTION: Reports big loss
FUJIKO COMPANY: Reports big loss
MICHINOKU BANK: To write off FY99 pension shortfalls
TORAY INDUSTRIES INC.: To trim 100B Yen from group debt
TOYOTA WOODYOU HOME CORP.: Posts 480M Yen group net loss

* K O R E A *

CJ INVEST.TRUST MGMT.: Suffers capital erosion
CJ INVEST.TRUST & SECURS.: Suffers capital erosion
DAEWOO CORP: Pays creditors 32.6 cents on the dollar
DAEWOO MOTOR: Ford, GM neck-and-neck in takeover race
HYUNDAI INVEST.TRUST: Group chair to post stock
HYUNDAI INVEST.TRUST: Restructuring falling behind  
KOREA HEAVY INDUS.& CONSTR.: Privatization not till Sept.
SAMSUNG INVEST. TRUST MGMT.: Suffers capital erosion
SAMSUNG INVEST.TRUST & SECURS.: Suffers capital erosion
TONG YANG ORION INVEST.TRUST: Suffers capital erosion

* M A L A Y S I A *

ASSOCIATED KAOLIN INDUS.: Danaharta appoints administrators
MBf NORTHERN SECURITIES SDN: K&N Kenanga likely bidder
PANCARAN IKRAB BHD: KLSE reprimands,fines
PARIT PERAK HOLDINGS BHD: Proposes restructure
TAIPING SECURITIES SDN: K&N Kenanga likely bidder

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

ASB REALTY INC.: DBS to buy shares, rejects Gokongwei offer
C&P HOMES: PhilRatings lowers credit rating
NATIONAL STEEL CORP.: Posts 1st quarter net loss
POSTALBANK : Gov't to sell soon
URBAN BANK: BSP favors reviving it
URBAN BANK: P450-M Pali loan violated banking laws,BSP says
VICTORIA MILLING CO.: Fails to bid out 53.35% of stock
WESTMONT INVESTMENT CORP.: BSP asked to pursue case against

* T H A I L A N D *

BANGKOK METRO.BANK: Sale nears completion
IMPERIAL PLAZA CO.: Submits rehab plan
PCM PRECAST FLOORS: Following debt restructuring plan
SOCON ENGINEERING: Submits rehab plan
STOCK EXCHANGE OF THAILAND: Puts 29 companies on notice
THAI TEL.AND TEL.PLC: Company, creditors seek rehab


AVONWOOD HOMES: Liquidator to meet affected customers
On 5 May 2000, Avonwood Homes was placed under a
professional liquidator, with over $A13m debt. Up to 1,100
investors seem unlikely regain their money.

Pattisons Business Advisors and Insolvency Specialists is
looking for other builders to finish work on Avonwood's
562 houses under construction. It is also calling for last-
minute tenders.  An investigation will determine whether
Avonwood over-extended itself to cope with the pre-Goods
and Services Tax building boom. Clendon Housing Group has
retracted its interest in Avonwood.

Meanwhile, Avonwood's liquidator was due to meet affected
customers in Melbourne the afternoon of May 6.

"He will be basically saying that they have two options,"
the spokesman said.  "The two options are that they can
contact the liquidator to make arrangements for engaging a
builder or they should contact the insurance company, which
will be on their contract. They could discuss with the
insurance company the next move."

The Housing Industry Association has urged homeowners not
to panic, saying insurance should cover the cost of
completing most homes and other builders would be found to
finish the work.  Mr Pattison said yesterday that he was
making an urgent assessment of the financial status of
Avonwood Homes Pty Ltd, Avonwood Homes (Aust) Pty Ltd and
Avonwood Homes (Qld) Pty Ltd.

All building work by Avonwood on the 562 homes under
construction stopped in the middle of last month. The
company had also taken deposits from a further 241
customers for contracts where construction had not yet
begun.  The gross value of those contracts was estimated to
be about $60 million, with liabilities of the Avonwood
Group estimated at more than $13 million, Mr Pattison
added.  (The Australian Financial Review, The Age  06-May-

BHP: HBI plant reduced to zero value
BHP could be about to write the final chapter in the
disastrous history of its hot briquetted iron adventure in
Western Australia, with the company facing potential losses
of $3.7 billion.

BHP last week wrote off another $1.14 billion from the
value of the HBI plant to cut its residual value to zero,
but the project still has one chance of survival. The
company plans to spend $46 million on a detailed study to
determine whether the HBI plant can be salvaged.

If not it will be shut down by the end of the year, leaving
BHP to pay another $1.1 billion to gas and electricity
suppliers who signed up for the life of the project. That
would bring total losses on the HBI plant to $3.7 billion.
When added to BHP's other two celebrated failures of recent
years, the Beenup mineral sands project and the Hartley
platinum mine, BHP's total writedowns come to $8.7 billion.

The HBI plant in the Pilbara region of Western Australia
was conceived in mid-1994 in response to pressure from the
West Australian Government to add value to the State's raw
iron ore exports and a booming Asian economy.

BHP figured that the Rio Tinto plan to produce iron
directly from iron ore was too great a technical risk and
opted instead for the intermediate route of producing an
enhanced iron feedstock from iron ore fines.

Hot briquetted iron would consume millions of tonnes of low
value fines through conversion into high iron content
briquettes destined for use in the popular electric arc
furnaces being built in Asia and simultaneously satisfy its
commitments to upgrade iron ore in Western Australia.

At a total expected cost of $750 million it seemed an
elegant solution.  The technology was already developed and
in operation in Venezuela and BHP was a self-confessed
expert at developing big projects.  As part of the HBI
strategy, BHP planned to build a new electric arc furnace
at the now closed Newcastle steelworks, a project which
would have added another $1 billion to its total potential

A plan was hatched for backward integration into Asia's
booming steel market building on a string of roll forming
and steel coating plants in Indonesia, Thailand, Singapore
and other countries where electric arc furnaces would
eventually be built to make the steel which would later be
turned into high value building products.

The plan was a disaster. The Asian economies crashed,
leaving BHP with a partly built HBI plant in Western
Australia and a collection of loss-making Asian factories
making unwanted roofing iron. Then came the real bombshell.

After announcing the HBI plant in August 1994 at an
expected cost of $750 million, the cost rose to $900
million by July the next year.  Rumours of cost blowouts,
engineering mayhem and labour unrest at the project
circulated for another two years until August 1997 when BHP
stunned the investment community with the news that the
cost of the HBI plant would rise to $1.654 billion and that
long standing BHP executive, Mr Dick Carter, would resign
over the debacle.

By October that year, the potential cost of the HBI plant
had blown out to a massive $2.45 billion, leaving BHP
chairman, Mr Jerry Ellis, and managing director, Mr John
Prescott, under severe pressure to resign. Mr Prescott
survived until April 1998 when the pressure of writedowns
associated with BHP's North American copper assets and the
strife over the HBI plant became intolerable.

By the time Korean steel maker Pohang Iron and Steel Corp
(POSCO) took delivery of the first HBI briquettes in mid-
1999 BHP was in a mess.  Magma Copper had been written back
to zero, the HBI plant was a disaster and more pressure was
looming over the troubled Beenup mineral sands play and the
Hartley platinum mine in Zimbabwe.

Steel prices had also plummeted, iron ore prices were
slashed in negotiations with the world's steel makers and
BHP looked unlikely to ever reap a return on its massive
investment.  Mr Paul Anderson, Mr Prescott's replacement,
has since been ruthless in removing the corporate disasters
from BHP's balance sheet. He opted to write off Magma and
later wrote off both Hartley and Beenup.

Now HBI is facing the same fate unless it can prove by the
end of this year that it can be a commercial success, a
chance the market last week rated as virtually zero.
(Australian Financial Review  08-May-2000)

BHP: Has second plant with zero book value
BHP's trouble-plagued $2.6 billion project at Port Hedland
in Western Australia has been beset by persistent
commissioning difficulties and safety issues, and, combined
with two previous writedowns, now has no value on BHP's
books.  BHP will decide the fate of the plant by the end of
this calendar year.

BHP chief executive Paul Anderson admitted yesterday that
the company had reset its corporate clock, thanks to the
leaden effects of its hot briquetted iron plant and Port
Hedland project on the company's recovery plan.

Mr Anderson said that the mining giant had completed much
of its consolidation phase but HBI, on which it wrote off a
net $794 million last Thursday, was a continuing problem.

"I think we've got a couple more years before we can say
the company is really where we want it," Mr Anderson said,
speaking on Business Sunday.  "I think it will be all the
way to five years before the culture and the company is
just clicking the way you would expect the company to
click.  I think, obviously, we've got these trailing
problems that we're dealing with such as HBI."

Apart from the HBI plant, the company was in control of the
"real issues" and is looking to grow, Mr Anderson said.

"We're going to aggressively pursue expansion projects like
Escondida phase four and we have a couple of projects that
will probably be announced in Petroleum in the next couple
of months," he said. "We have a lot of initiatives in areas
such as shared services, further restructuring to take
embedded costs, the hard core costs, out ... and we're in
the middle of that."

Mr Anderson also said BHP had "three solid" e-commerce
initiatives planned, including providing Web access for all
employees and establishing four purchasing portals.
(Sydney Morning Herald  08-May-2000)

BHP: To close Ok Tedi mine
Australian mining giant BHP will close its controversial Ok
Tedi copper mine which has been blamed for massive
pollution in far western Papua New Guinea.

But BHP chief executive Paul Anderson would not give a date
for the mine's closure.  The mine accounts for about one-
fifth of Papua New Guinea's export earnings and 10 per cent
of its economy.

"Ok Tedi worries me," Mr Anderson told Nine Network TV
yesterday.  "I think our image is dependent upon following
it through to a responsible conclusion and not simply
backing out of it.  I want to close the mine at a
reasonable point in time, yes, basically consistent with
what the World Bank recommends."

Mr. Anderson declined to give a target date for the mine's
closure, but said it would be before the full economic life
of the mine was realised.  The mine has 10 years to run on
its 30-year life, but in March a leaked World Bank report
found it should be closed immediately on environmental

"I think it is premature to take a date on that," he said
when asked when the mine might be closed. "I think that BHP
should stick with the mine through a responsible closure
plan.  Now if we can't achieve a responsible closure plan
then we have to rethink our involvement in the mine."

Papua New Guinea Prime Minister Sir Mekere Morauta on
Thursday ordered a government review of the mine which is
52 per cent owned by BHP, 30 per cent by the PNG government
and 18 per cent by a Canadian mining company.  Ok Tedi
Mining, operators of the mine at Tabubil in remote Western
Province near the Irian Jaya border, in August admitted the
discharge of mine tailings, siltation and blocking of
rivers by that discharge and erosion from waste dumps had
caused extensive flooding and killed fish and vegetation.

Western Province landowners last month started a civil
action against BHP in the Victorian State Supreme Court for
unspecified damages for its failure to build a dam to
prevent pollution running downriver.  Sir Mekere made it
clear in his announcement that the social and economic
impacts were just as important as the environmental issues.

"They obviously need to be weighed very carefully," he

He said the government would undertake "an independent
review of the financial costs of lessening the impacts of
the mine closure, and of any potential compensation."

Waste from the mine has caused flooding across several
hundred kilometres of land in Western Province.  Mr
Anderson had previously said that shutting the mine, while
the best option for the environment, would be the worst
decision for PNG's economic and social welfare.

BHP and its partners agreed in 1996 to pay up to A$500
million (about HK$2.3 billion) to settle an eight-year
court battle with local landowners over damage caused by
mine waste in the Ok Tedi and Fly river systems.

The mine began producing gold in 1984 and copper in 1987
and has an annual capacity of about 190,000 metric tonnes
of copper, 500,000 ounces of gold and 1.2 million ounces of
silver, all contained in concentrate. (South China Morning
Post  08-May-2000)

GOLDEN WEST: To sell US refineries
Troubled Golden West Refining is closing down its North
American gold refining operations as the repercussions
continue from the disappearance of $20 million worth of its
gold from a Peruvian warehouse last year.

This disappearance led to most of the staff at its North
American subsidiary, Handy & Harman Refining Group, either
being sacked or resigning, with one executive facing
charges of fraud from another gold transaction. HHRG had
its bank accounts frozen.  Golden West has already
announced that the Peruvian loss will plunge it further
into the red this fiscal year.

The gold had been bought from a Peruvian miner but after
the $20 million was paid over, the metal was returned to
the mining company without Golden West's knowledge.
Golden West Refining told the Australian Stock Exchange
late on Friday that one substantial creditor had blocked
refinancing of the HHRG operation and this had restricted
the flow of metal into and out of its main Attleboro

It said it would cease refining under present arrangements
at HHRG's operations, and lay off staff.  It would complete
refining of all gold in process at present to repay
existing metal credit facilities.

Operations at the South Windsor, Phoenix, and Villa Park
low-grade refineries would cease completely, and these
plants would be sold.  It said a number of companies were
interested in buying the plants and the sales were expected
to be completed by the end of July. (The Australian  08-

MUSEUM OF CONTEMPORARY ART: Sartor sweetener may save it
The Lord Mayor, Councillor Frank Sartor, has amended Sydney
City Council's $59 million rescue plan for the Museum of
Contemporary Art to make it more attractive to the State

It is believed the new plan reduces, if not eliminates, the
financial commitment required of the Government, which is
insisting any bail-out of the MCA not involve taxpayers'
money.  Cr Sartor, who flew out at the weekend for Greece,
is understood to have met the Premier, Mr Carr, on Tuesday
in a bid to salvage his proposal for a major refurbishment
of the MCA building and construction of a small cinema

Their meeting was the first since the Premier ruled out a
$14.5 million contribution which is needed to help meet the
proposed cost of Cr Sartor's ambitious refurbishment plan.
While it is understood Mr Carr has left the door open for
compromise, the Government continues to insist that it
provide no new public money for the MCA after its $750,000
injection to the museum last August.

If the Government accepts the council's revised plan the
question remains, however, over who will be responsible for
the museum's expected budget deficit of $1.8 million.
Last week the Herald disclosed that a report of Deloitte
Touche Tohmatsu found the museum faces a "worst case"
budget deficit of $1.8 million by the end of the year with
its losses set to accrue from this month.

The report predated the museum's signing of a new
sponsorship deal in which will underwrite the
cost of free public entry for one year, beginning on May
26.  While the museum's management believes the losses can
be contained, the extent of the deficit is believed to be
behind a softening opposition from the University of Sydney
to a rescue plan. The support of the university is vital
because it appoints the MCA board and has furnished two
loans to the MCA worth a total of $5.8 million.

The university has proposed setting up a campus for
postgraduate study at the MCA and has canvassed with the
Government a board restructure.  The Deloitte report says
the current relationship between the MCA and the university
has several financial benefits. As landlord, the university
insures the museum's assets, which are worth $120 million,
it pays director's liability insurance on behalf of the
MCA, and the MCA's building is exempt from rates and land
tax by virtue of its relationship with the university.

If the relationship changes, the report says, these
exposures could change as well.  The assessment also refers
to a legal dispute between the university and State
Property regarding the use of vacant space in the MCA
building. (Sydney Morning Herald  08-May-2000)

WATER WHEEL HOLDINGS: Creditors report may trigger probe  
On 5 May 2000 a creditors report to Water Wheel Holdings
suggested an investigation may be required under the
corporations law.

The issue arose at a creditors' meeting at which the
administrator, Christopher Daly, said that a more thorough
investigation of the knowledge and experience of the
company's directors was required. (ABIX - Australasian
Business Intelligence  06-May-2000)

C H I N A  &  H O N G  K O N G

ART FAIR COMPANY LTD: 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 The
Hongkong and Shanghai Banking Corporation Limited for the
winding up of Art Fair Company Limited. A notice of legal
appearance must be filed on or before May 16.

CREATIVE RISE LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 7 on the petition of Ng
Chak Tin, Tineil for the winding up of Creative Rise
Limited. A notice of legal appearance must be filed on or
before June 6.

HAPPY FOOK ENTERPRISES LTD: 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
Lycrown Asia Limited for the winding up of Happy Fook
Enterprises Limited. A notice of legal appearance must be
filed on or before May 16.

HONG KONG AUCTIONEERS & ESTATE: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of Yu
Chai Sum for the winding up of Hong Kong Auctioneers &
Estate Agency Limited. A notice of legal appearance must be
filed on or before June 13.

JADE KAN INT'L DEVEL.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 7 on the petition of Hua
Chiao Commercial Bank Limited for the winding up of Jade
International Development Limited. A notice of legal
appearance must be filed on or before June 6.

MANSION EASY LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 21 on the petition of
Cheng Chor Wah for the winding up of Mansion Easy Limited.
A notice of legal appearance must be filed on or before
June 20.

PANTECH COMMUNICATIONS 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
Unicom Paging (Hong Kong) Limited for the winding up of
Pantech Communications Limited. A notice of legal
appearance must be filed on or before May 9.

SHUN HING INT'L DEVEL.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of Po
Sang Bank Limited for the winding up of Shun Hing
International Development Limited. A notice of legal
appearance must be filed on or before June 13.

SMART HERO INT'L CO.LTD.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 7 on the petition of Hua
Chiao Commercial Bank Limited for the winding up of Smart
Hero International Company Limited. A notice of legal
appearance must be filed on or before June 6.


DAIWA CONSTRUCTION: Reports big loss
FUJIKO COMPANY: Reports big loss
Midsize construction firms Fujiko Co. (1809) and Daiwa
Construction Co. (1829) reported Tuesday that charges for
unrealized losses on properties and bad debt led to sizable
losses for the year ended March 31.

Fujiko posted a net loss of 1.15 billion yen after
recording extraordinary expenses totaling nearly 2 billion
yen. The company booked a charge of about 200 million yen
against properties that have fallen more than 50% in value
and other property held for resale. It also set aside 1.6
billion yen toward its reserves against bad debt.

Daiwa Construction reported a net loss of 1.19 billion yen,
its first loss since going public. It took a valuation loss
of roughly 80 million yen on properties, and it wrote off
about 1.8 billion yen worth of unrecoverable receivables on
work. Both firms will continue to suspend payment of
dividends.  (Nikkei  05-May-2000)

MICHINOKU BANK: To write off FY99 pension shortfalls
Michinoku Bank (8350) will take a special charge of 7.6
billion yen to dispose of its retirement allowance and
pension shortfalls for the fiscal year ended March 31.

The regional bank, based in Aomori Prefecture, has pension
assets of 20.2 billion yen and retirement payout reserves
of 4 billion yen against a pension obligation of 31.8
billion yen.  To help dispose of the shortfalls, Michinoku
plans to use an extraordinary gain of 1.7 billion yen,
partly garnered from the sale of company housing.

As a result, Michinoku Bank is expected to report a fiscal
1999 net profit of 200 million yen, substantially less than
its earlier prediction of 3 billion yen. In addition, the
bank raised its projection for net operating profit to 13.5
billion yen and pretax profit to 6.5 billion yen. (Nikkei  

TORAY INDUSTRIES INC.: To trim 100B Yen from group debt
Toray Industries Inc. (3402) hopes to slash consolidated
interest-bearing liabilities by 100 billion yen from the
March 31 level to 520 billion yen by March 2003.

The synthetic fiber producer believes that the overseas
investments it has made over the past three years will
start making a real contribution to cash flow, and aims to
use these funds to reduce debt and strengthen its financial

Over the three years to March 31, Toray invested a total of
200 billion yen in 24 projects in 10 overseas countries.
Capital outlays have ranged from 96-140 billion yen per
year over the past five years.  But the company has now
largely completed these large-scale investments, and for
the next three years its planned capital spending of less
than 80 billion yen a year should fall within the bounds of

Although Toray has not disclosed earnings targets for the
next three years, it will need to show an average
consolidated pretax profit of about 60 billion yen per year
in order to generate total free cash flow of 100 billion
yen over that period. (Nikkei  05-May-2000)

TOYOTA WOODYOU HOME CORP.: Posts 480M Yen group net loss
Toyota Woodyou Home Corp. (1796) announced Tuesday that it
posted a 480 million yen consolidated net loss in fiscal
1999, down significantly from the initial estimate of 170
million yen in net profit.

The housing retailer of the Toyota Motor Corp. (7203) group
fell in the red on a consolidated basis for the third
straight year.  The firm had sold off real estate at
discount prices in an attempt to decrease inventory. It
also booked 130 million yen in valuation losses on real
estate for sale, and booked another 130 million yen in
loan-loss reserves.

Consolidated sales, however, grew 19% on the year to 18.4
billion yen. Low interest rates and a tax cut on housing
loans boosted the number of homes sold by slightly less
than 30% compared with the previous year. Sales of land,
mainly for homes, also grew. (Nikkei  06-May-2000)


CJ INVEST.TRUST MGMT.: Suffers capital erosion
CJ INVEST.TRUST & SECURS.: Suffers capital erosion
SAMSUNG INVEST. TRUST MGMT.: Suffers capital erosion
SAMSUNG INVEST.TRUST & SECURS.: Suffers capital erosion
TONG YANG ORION INVEST.TRUST: Suffers capital erosion
Second-tier domestic investment trust companies saw their
equity capital eroded by losses on bonds issued by the
failed Daewoo Group in the last fiscal year, according to
industry sources.

CJ Investment Trust & Securities posted around 40 billion
won in net losses for the fiscal year after reflecting a
140 billion-won loss on Daewoo bonds. That will reduce the
firm's net worth to 30 billion to 50 billion won, far lower
than its paid-in capital of 230 billion won.

In order to make up for the capital erosion, CJ conducted a
rights offering in February as well as plans to attract
foreign investment. If it cannot raise sufficient foreign
capital, the company will consider another rights issue.

CJ Investment Trust Management also suffered a loss of some
20 billion won on Daewoo's debts, which impaired more than
half of its capital stock.

Despite a 120 billion-won operating profit, Samsung
Investment Trust & Securities recorded 70 billion in net
losses due to its exposure to Daewoo, which collapsed last
year. However, it suffered only minor capital erosion,
which amounted to seven billion won, thanks to its existing
capital reserves.

Samsung Investment Trust Management incurred a loss of 8.6
billion won in fiscal 1999, but it raised 30 billion won
through rights offering in March to increase its own
capital to 85.5 billion won, or 7.7 billion won short of
its capital stock.

Despite strong operating income of over 100 billion won,
Tong Yang Orion Investment Trust saw its net profits for
the fiscal year shrink to slightly over 10 billion won due
to heavy exposure to Daewoo.  After closing its book for
fiscal 1999, Tong Yang Orion saw its owners' equity fall
far short of its 150 billion-won paid-in capital.  The
asset management company raised 30 billion won via new
share issues in January, and is considering additional
capital increases.

Although undercapitalized, the investment trust firms
claimed they would be able to make up for the capital
erosion with operating profits they expect to see in the
future. (The Korea Herald  08-May-2000)

DAEWOO CORP: Pays creditors 32.6 cents on the dollar
Daewoo Corp.'s payout to creditor banks will be 32.6 cents
on the dollar, according to the most recent terms of a
proposed settlement of the South Korean company's
nonperforming debt.

Also, HSBC Holdings PLC has a total of $316 million in
nonperforming loans in Korea, the bulk of which is in
Daewoo Group.  Both figures were misstated in an article in
Thursday's issue.  (The Asian Wall Street Journal  05-May-

DAEWOO MOTOR: Ford, GM neck-and-neck in takeover race
Ford Motor has recently achieved remarkable progresses in
its bid for Daewoo Motor and is now neck-and-neck in its
battle with General Motors to acquire the ailing Korean
automaker, government and creditor officials said

In the initial stage of the Daewoo Motor bidding, GM
appeared to have a solid lead, but Ford has been rapidly
gaining ground against its U.S. rival through various
aggressive moves, said the officials.

"All of the five bidders for Daewoo are becoming
increasingly active. Of the five, however, moves by GM and
Ford are most noticeable," said an official at the
Financial Supervisory Commission.

Another FSC official said that Ford has lately shown
stronger willingness to buy Daewoo than GM, receiving
favorable responses from the government and creditors.
"With GM's initial lead increasingly eroded by Ford, the
final result is totally unpredictable."

Apparently because of the fierce competition, meanwhile,
the selection of one or two priority negotiators for sale
of Daewoo Motor, originally slated for the end of next
month, will likely be delayed by one month, sources at the
Daewoo Group Corporate Restructuring Committee said.

"Compilation of the automaker's combined financial sheets
by PriceWaterhouseCoopers may be delayed by one month," a
committee spokesman said, adding that the government's plan
to select the successful bidder by the end of August may
also be affected as a result. "After the financial sheets
are drawn up at the middle of this month, the five bidders
will submit their final conditions, including price, to
creditors," he said.

According to analysts, GM and Ford are pursuing Daewoo so
vigorously because a takeover of Korean automaker would
likely make the winner the top seller in the world. GM and
Ford are undisputedly the world's No. 1 and No. 2
automakers with respective output capacities of 8.75
million units and 6.76 million units in 1999. The
acquisition of Daewoo Motor and affiliated Ssangyong Motor,
which had a combined output of 1.03 million units last
year, will further solidify GM's leadership.

In contrast, Ford will be able to seize a golden
opportunity to rise to the No. 1 position with a victory in
the Daewoo bidding.

"Apart from the race to expand output capacity, both GM and
Ford seem to view Daewoo as indispensable to their Asian
strategy calling for a 10 percent stake by 2005," said an
analyst. "Both firms have come up with similar pledges in
terms of technology transfer, investment, employment and
relations with parts suppliers. Therefore, Ford may attempt
to present a far higher price to overtake GM's lead," he

GM has cited its past business ties with Daewoo Motor as a
strong point, whereas Ford insisted that all of its recent
M&A projects, including Jaguar and Mazda, have resulted in
drastic increases in sales and profitability.  Wayne
Booker, vice chairman of Ford Motor, said in a press
conference in Seoul this week that Daewoo Motor is
indispensable to Ford as "the engine for growth" in Asia
and Eastern Europe.

Aware of the strong labor resistance to a new foreign
owner, he stressed that Ford is strongly committed to
protecting the interests of Daewoo's workers and parts
suppliers and to transferring cutting-edge automobile
technologies to Korea.

In a bid to counter Ford's offensive, GM Chairman Jack
Smith plans to come to Seoul May 9 and 10, attempting to
persuade government and creditor officials that GM is the
best partner for Daewoo Motor. (The Korea Herald  08-May-

HYUNDAI INVEST.TRUST: Group chair to post stock
Hyundai Group Chairman Chung Mong-hun will hand over all of
his shares in unlisted companies to help clean up Hyundai
Investment Trust and Securities' debts and settle a capital
shortage of 1.2 trillion won (US$ 1.1 billion).

The equity holdings of Hyundai affiliates in unlisted
sister companies Hyundai Information Technology, Hyundai
Logistics and Hyundai Autonet worth 1.7 trillion won will
go to Hyundai Investment Trust as collateral for debt

Hyundai Investment President Lee Chang-shik and Hyundai
restructuring headquarters chief Kim Jae-soo said Thursday
that Hyundai Investment can cash in the collateral if it
fails to clean up debts by the end of the year.

Under the restructuring plan, Chung will put up 9,816
shares in Hyundai Information Technology with a book value
of 49 million won and 1,773,331 shares in Hyundai Logistics
with a book value of 8.9 billion won.  Hyundai will
recapitalize, secure foreign investment and sell assets to
turn the company around by the end of the year.  (Asia
Pulse  04-May-2000)

HYUNDAI INVEST.TRUST: Restructuring falling behind  
The liquidity crisis at Hyundai Investment Trust and
Securities (HITC) has highlighted a cross-section of
problems in the nation's financial industry.

Share markets plunged for two market days following the
reports of the liquidity crisis and not only government
departments such as the Ministry of Finance and Economy
(MOFE) and the Financial Supervisory Commission (FSC), but
also Hyundai's major creditor bank, Korea Exchange Bank
(KEB), have all had to join in rescue efforts.

Although the government has injected a total of W64
trillion in public funds since 1998 to save the nation's
financial industry, there has been no visible outcome to
date, largely due to the surfacing of undisclosed bad
assets at troubled financial firms.  According to the
Financial Supervisory Service (FSS), Korea's financial
sector had a total of W66.7 trillion in bad assets as of
the end of last year, amounting to 11.3% of their total
loans outstanding.

Analysts, however, claim the real amount of bad assets far
exceeds the above figure because the bad assets of
investment trust companies (ITCs) have not been factored
into the figure. When the bad assets of ITCs are included,
the total amount of bad assets in the financial industry
would easily exceed W80 trillion.

Making things even worse, the banking sector is at risk due
to W100 trillion in loans to private businesses undergoing
workouts. The government has been making considerable
progress on banking-sector restructuring despite the crisis
at the Daewoo group last summer, but the government has
been unable to come up with any policy to rescue ITCs, as
operation and management problems in such firms have been
far more serious than at banks.

Critics say the government's recommendation to begin the
95% redemption of Daewoo bonds has ended up only worsening
the amount of bad assets at ITCs.  The government has been
stressing that its restructuring of the banking sector has
been complete in the "hardware" area of infrastructure, but
admits that restructuring of "software" remains to be
carried out. Banking industry analysts have, however,
diagnosed government reform in the area of infrastructure
and deemed it not yet complete, believing it to still be in
its beginning stages.

According to an official at the Bank of Korea (BOK), a
merger between two banks would result in savings of W20-30
billion annually for each bank in their computerization
expenditures, but local banks have been reluctant to come
forward to merge because M&As are associated primarily with
streamlining of the organization and employee reductions.

The government, which might be able to help out in this
case, has been unable to this year, as public funds have
been running short, making it hard for officials to offer
up carrots to banks to encourage them to steer ahead with

In addition to problem in these sectors the corporate world
is far from out of the woods with regard to its own
restructuring. The National Tax Service (NTS) announced
that it would mount a tax evasion investigation into the
four top chaebol at the end of last month, calling it a
routine check.

However, it later transpired that the NTS will concentrate
on the internal transfer of shares amongst families
controlling the groups, brought on by the highly visible
in-fighting at the Hyundai group for managerial control,
which showed just how far restructuring still has to go.
Other evidence of mismanagement was apparent at HITC,
highlighting the cumbersome structure of one man control.
(Digital Chosun  06-May-2000)

KOREA HEAVY INDUS.& CONSTR.: Privatization not till Sept.
Due to concerns over declining share prices on the local
bourse, the government has delayed until September its
plans to privatize state-run Korea Heavy Industries and
Construction Co., (HANJUNG), the Ministry of Commerce,
Industry and Energy said yesterday.

The ministry's decision stems from projections that the
listing of HANJUNG shares on the local bourse would flood
an already bearish market, hindering stabilization of stock
prices.  Also, the ministry said it would issue 14 million
new HANJUNG shares as part of stocks scheduled for
inclusion in a strategic alliance with major foreign

The ministry will also allow foreign companies to buy into
the state-run company through purchases of convertible
bonds.  Until now, the ministry has selected General
Electric and Westinghouse as candidates for strategic
alliance with HANJUNG.

"The companies seeking strategic tie-ups prefer to purchase
new shares which will remain with HANJUNG, rather than buy
existing shares which would be absorbed by existing
shareholders," a ministry official said.

Following the issue of new shares, HANJUNG's total shares
will increase from 10,420 shares to 11,820.  However, the
ministry said it would retain its plans to sell up to a 25
percent stake in the state-run company.  The strategic
alliances will be completed during the third quarter, the
ministry official said. (The Korea Herald  07-May-2000)


ASSOCIATED KAOLIN INDUS.: Danaharta appoints administrators
Pengurusan Danaharta Nasional Bhd has appointed Gong Wee
Ning and Lim San Peen of PricewaterhouseCoopers as Special
Administrators of Associated Kaolin Industries Bhd (AKI),
effective May 3.

In a statement here today, Danaharta said with the
appointment, the Special Administrators would assume
control of the assets and affairs of AKI.  The powers of
the management and the Board of AKI are effectively
suspended and only the Special Administrators can deal with
the assets of the company, it added.

The appointment of Special Administrators is provided for
under Section 24 of the Pengurusan Danaharta Bhd Act 1998.
Their appointment has been approved by Danaharta's
Oversight Committee, a three-member committee with one
representative each from the Ministry of Finance,
Securities Commission and Bank Negara Malaysia, said

It said in order to preserve the assets of AKI until the
administrators are able to complete their task, a 12-month
moratorium will take effect from the date of appointment.
During the period, no creditor can take action against the
company, it added. Danaharta said the administrators will
prepare a workout proposal which would be examined by an
independent advisor.

The advisor's role is to review the reasonableness of the
proposal, taking into consideration the interests of all
creditors (whether secured or unsecured) and shareholders,
it added.  If Danaharta approves the proposal prepared by
the Special Administrators, the latter will call for a
meeting of secured creditors to consider and vote on the

Danaharta said a majority in value of secured creditors
present and voting at the meeting must approve the proposal
before it can be implemented, adding that relevant
regulatory approvals must also be obtained.  AKI's
principal activities are the manufacture and sale of
refined kaolin, logging and downstream timber processing.
The company is listed on the Second Board of the Kuala
Lumpur Stock Exchange. (Asia Pulse  03-May-2000)

PANCARAN IKRAB BHD: KLSE reprimands,fines
The Kuala Lumpur Stock Exchange (KLSE) has reprimanded and
fined two companies - Austral Amalgamated Bhd and Pancaran
Ikrab Bhd - for breach of its listing requirements.

Austral Amalgamated (A Amal) received a public reprimand
and was fined RM100,000 for failing to submit its annual
report within six months after the close of its financial
year end of June 30, 1999.

According to the KLSE, this is the second breach of listing
requirements committed by A Amal. In October last year,
Austral was reprimanded for failure to make an immediate
announcement on the acquisition of shares in RNC Corp Bhd.
The KLSE also issued a public reprimand and imposed a fine
of RM100,000 on Pancaran Ikrab (Pancaran) for failure to
make an immediate announcement pertaining to a property
development project in Port Dickson.

On May 14, 1999, Pancaran announced to the KLSE that its
subsidiary, Pancaran Properties Sdn Bhd had earlier entered
into a joint venture agreement with Hou Ji Sdn Bhd on Dec
17, 1997, which amounts to a delay of some 17 months.
(The Edge  04-May-2000)

MBf NORTHERN SECURITIES SDN: K&N Kenanga likely bidder
TAIPING SECURITIES SDN: K&N Kenanga likely bidder
Stockbroking-based K&N Kenanga Bhd is likely to make a
strong bid for MBf Northern Securities Sdn Bhd and Taiping
Securities Sdn Bhd, now under the management of Pengurusan
Danaharta Nasional Bhd.

Sources say the stockbroking firm, which is aiming to be
one of the 15 universal brokers upon the industry's
consolidation, is keen to take over the two troubled firms
especially after it was unsuccessful in its first two bids.

K&N Kenanga had earlier put in bids for WK Securities Sdn
Bhd and Halim Securities Sdn Bhd, both under Danaharta.
However, Kuala Lumpur City Securities Sdn Bhd snapped up WK
Securities; and Apex Equity Holdings is coughing up RM100
million cash for Halim Securities.  Danaharta is expected
to sell MBf Northern and Taiping Securities by tender as a
combined unit. The last acceptable bid has to be in by May

Sources say K&N Kenanga is expected to face keen
competition, as at least two other large non-bank-backed
stockbrokers are also putting in their bids. The minimum
asking price for both is said to be RM100 million -- RM62
million for MBf Northern and RM38 million for Taiping
Securities.  Analysts, however, put the fair price for both
firms as closer to RM90 million. MBf Northern has debts of
some RM400 million and Taiping Securities has about RM250

"The only attraction (for potential buyers) is the tax
credits they will accumulate. That, and the fact that the
industry has to merge," says an industry observer.

Seen as more cautious than some of its more acquisitive
counterparts, K&N Kenanga has so far refrained from going
on a shopping spree despite having been approached by
numerous smaller stockbrokers. A source says although K&N
Kenanga was initially in preliminary talks with a few
stockbrokers, discussions fell through mainly owing to lack
of agreement on price tags.  (The Edge  05-May-2000)

PARIT PERAK HOLDINGS BHD: Proposes restructure
Parit Perak Holdings Bhd has proposed a restructuring
scheme which includes a capital reduction, rights issue,
debt restructuring and the acquisitions of two companies.

Commerce International Merchant Bankers Bhd said in a
statement on behalf of Parit Perak that the company would
reduce its paid-up capital from RM150mil to RM120mil by
cancelling 20 sen of the par value of its existing 150
million RM1 shares.  Subsequently, the capital would be
consolidated, with every 1.25 shares of 80 sen each
constituting one RM1 share.

Parit Perak also plans a renounceable rights issue of 40
million RM1 shares with 40 million free detachable
warrants, on the basis of one share and one warrant for
every three shares held after the proposed capital
reduction and consolidation.  The company would then buy
Tropical Forests Resorts Bhd (TFRB) for RM160mil and DK
Development for RM50mil, with full payment to be satisfied
by the issuance of Parit Perak's RM1 shares at par value.

TFRB is a dormant company which, through wholly-owned
Terangvest Sdn Bhd, owns 832.33ha in Terengganu with an
unexpired lease of 49 years. This land, together with the
adjacent 4,654ha designated "permanent forest reserve,"
would be developed into a time-share safari resort, Taman
Safari Hulu Dungun.

Terangvest also has a timber extraction licence for six
months ending June 14, 2000, for part of its land.
DK Development, for its part, is developing the Kemayan
Square Shopping Mall on 6.07 acres in Seremban.
Parit Perak also proposes to restructure its debts and
those of its subsidiaries totalling RM441mil as at Dec 31,
1999. The proposed terms would include issuance of
securities and waivers of some debts.

In anticipation of a rise in its paid-up capital pursuant
to the proposals, Parit Perak also proposes to double its
authorised share capital to RM1bil.  It also proposes to
implement an employee share option scheme for eligible
staff and executive directors of the group.

Parit Perak said the restructuring scheme would return it
to a secure financial footing and profitability. The group
had suffered losses for the past two financial years ended
June 30, 1998 and 1999. (The Star  06-May-2000)


ASB REALTY INC.: DBS to buy shares, rejects Gokongwei offer
The Development Bank of Singapore, Ltd. (DBS) is prepared
to buy the combined 18% stake of ASB Realty, Inc. and its
owner, Luke Roxas, in its local subsidiary when the new
General Banking Act (GBA) takes effect.

DBS Bank Philippines, Inc. president and chief operating
officer Pascual M. Garcia III said ASB Realty and Mr. Roxas
have offered to sell their holdings in the local bank but
DBS is hampered by the existing law from purchasing the

Under existing rules, a foreign bank may own only up to 60%
of a local bank. The Singaporean bank already owns 60% of
DBS Bank. The passage of the amendments to the GBA,
however, will allow foreign banks to wholly-own a local

"They have offered (to sell their shares). We are prepared
to consider acquiring the shares as soon as amendments to
the GBA are passed. The new GBA would provide us more
flexibility ... and allow us to increase our ownership from
60% to 100%," Mr. Garcia told BusinessWorld.

Mr. Garcia said ASB Realty currently holds 16% of DBS Bank
while Mr. Roxas has 2%. An industry source said DBS Bank
has thumbed down the Gokongweis' offer for the bank.
Declining to disclose the price, the source said the offer
price was "not at the desired level."  

The Gokongweis lost out to Metropolitan Bank and Trust Co.
(Metrobank) for the negotiated purchase of AsianBank Corp.
late last year. Sources said the Gokongwei family's offer
for AsianBank was lower by about 250 million Philippine
pesos (PhP) (US$6 million at PhP41.279:US$1).

Last year, the Gokongweis sold their substantial stakes in
PCIBank and Far East Bank and Trust Co. The family still
owns a bank, Robinsons Savings Bank Corp., through holding
firm JG Summit Holdings, Inc.

DBS currently holds 20.22% stake in the merged Bank of the
Philippine Islands (BPI). The Singaporean giant has
obtained approval from the Bangko Sentral (Central Bank of
the Philippines) to purchase up to 25% of BPI, which is
equivalent to roughly four board seats. DBS' investment in
BPI already exceeds $700 million while its investment in
local arm DBS Bank is only $40 million. Another shareholder
of DBS Bank is McDonald's local franchise holder George T.
Yang, among others. (Business World  08-May-2000)

C&P HOMES: PhilRatings lowers credit rating
Philippine Rating Services Corp. (PhilRatings) recently
said it has downgraded the credit rating of property
development firm C&P Homes due to the firm's liquidity

In a statement, PhilRatings said it has reduced its rating
for C&P's outstanding P3-billion long-term commercial debt
paper (LTCP) from "PRS Ca to PRS C," meaning that the loan
is already in default.  The ratings agency said the
downgrade was due to the C&P's liquidity problems which
prompted the company to stop paying interest on the LTCP
since November last year.

C&P, one of the country's biggest mass housing developers,
used the proceeds of the P3-billion LTCP it issued in
November 1996 to finance its housing development projects.
Half of the LTCP will mature in November 2001 while the
remaining half will mature in November 2003.

In 1998, PhilRatings already lowered the property firm's
credit rating to PRS Ca-equivalent to poor standing-from
PRS B due to the continued decline in the housing sector,
the company's huge debt burden and low collection from
buyers of low-cost housing.

The ratings agency said in 1998, the company set aside
P3.32 billion in "extraordinary charges" to cover cancelled
sales and uncollected receivables from home buyers. This,
coupled with a decrease in operating income, led to after-
tax losses of P 3.39 billion in the same year.

Although the firm's operating income reached P651 million
and its net income reached P44 million in 1999, PhilRatings
said "the company's high interest expense coming from its
highly leveraged position raises concerns over C&P Homes'
ability to generate cash and pay down its debt."

Aside from the P3-billion LTCP,the property firm has
outstanding debts which include $150-million floating rate
notes maturing in 2003 and P5 billion in debt owed to local
banks.  PhilRatings said the property firm is now
negotiating with LTCP holders to restructure its debt
obligations through asset-for-debt swap arrangement.
C&P is majority owned by House Speaker Manuel Villar.
(Business World  04-May-2000)

NATIONAL STEEL CORP.: Posts 1st quarter net loss
Debt-laden National Steel Corp. (NSC) recently posted a net
loss of 698.05 million Philippine pesos (PhP) (US$17
million at PhP41.279:US$1) for the first quarter of the
year, an improvement from the PhP766.16-million ($18.7
million) loss in the same period last year.

Net sales for the period dropped to PhP65.27 million ($1.6
million) from PhP1.40 billion ($34 million) the year
before, while gross profits rose to PhP117.82 million ($2.9
million) from PhP99.85 million ($2.4 million) in the first
quarter of 1999.

Meanwhile, the Securities and Exchange Commission (SEC) has
given NSC until May 17 to submit its amended rehabilitation
plan. NSC's debt-moratorium is set to lapse also on the
said date. A team, composed of the three-member
receivership committee and representatives from NSC
management and creditor banks, was created to draft the
firm's rehabilitation plan.

NSC earlier sought additional time to draft the rehab plan
"due to the various complex subjects of the negotiations
between the company and potential investor Duferco SA." In
its earlier manifestation, the steelmaker disclosed it is
in the final stages of negotiating with Duferco, which is
said to be the "largest independent trading company in the
world and the largest worldwide free trader of slabs."
(Business World  08-May-2000)

POSTALBANK : Gov't to sell soon
Continuing its selling spree of state-owned banks this
year, the Department of Finance (DoF) plans to offer soon
the government's 100% stake in Philippine Postal Savings
Bank Inc. (PostalBank).

The sale is included in the privatization plan of
Philippine Postal Corp. (Philpost) currently being prepared
by the World Bank, a DoF official said.

"The bank is 100% owned by Philpost. Government wants to
sell its 100% stake in Philpost, so that includes the
bank," a member of the DoF's Committee on Privatization

But the government is still waiting for the World Bank
study on the Philpost sale before it prepares a separate
privatization plan for PostalBank.  Valuation of the thrift
bank's assets will start as soon as the Philpost
privatization plan is completed, the source said.

The state-owned thrift bank is the second government bank
to be put on the auction block this year. The DoF is
gearing for the full privatization of Philippine National
Bank by the end of the month.  Selling government's shares
in PNB and PostalBank is expected to help fund the
government's 62.5-billion-peso (US$1.5 billion at
PhP41.279:US$1) budget gap committed with the International
Monetary Fund.

PostalBank was originally established in 1906 and dissolved
by the Marcos government in 1976 as it was viewed to be
adversely affecting private banking endeavors. It was
reopened in 1994 upon the instruction of President Ramos
"to generate additional domestic savings." (Business World  

URBAN BANK: BSP favors reviving it
Philippine banking regulators believe rehabilitation,
rather than liquidation, is the answer to the financial
woes of Urban Banking Corporation.

Bangko Sentral ng Pilipinas governor Rafael Buenaventura
said a revival is more possible than liquidation, given
that a number of local and foreign groups are keen on
acquiring Urban Bank's license.

"We came to the conclusion that it probably need not get
(liquidated) because somebody will get it at a right
price," Buenaventura said.

The task of determining whether Urban Bank needs to be
rehabilitated or liquidated is now with the Philippine
Deposit Insurance Corporation (PDIC) which has been
designated as interim receiver of the bank, since it
declared a holiday on April 26.

Under the law, the government-run PDIC has 90 days to
determine what actions to take to pay the bank's
liabilities, including insured and uninsured deposits.
Urban had to suspend operations in the wake of heavy cash
withdrawals by depositors in recent weeks. Reports said
Urban Bank depositors became jittery over concerns the bank
would downgrade its status to a thrift bank from that of a
commercial bank.

PDIC president Norberto Nazareno has identified a number of
foreign and local banks interested in acquiring Urban Bank.
Among the groups reportedly willing to act as white knight
to the troubled commercial bank include Banque Nacional de
Paris, Keppel Bank of Singapore, and an investment house
said to be representing a Thai bank.

Among the local groups, Banco de Oro of shopping mall
tycoon Henry Sy appears to be the most interested to pursue
a buy-out of Urban Bank.  Buenaventura said International
Exchange Bank, the medium-sized bank that was also hit by
heavy withdrawals last week, may revive plans to acquire
Urban Bank once it resolves its own problems.

Urban Bank, which has P11.9 billion in assets, is one of
the smallest of the 52 commercial banks operating in the
Philippines.  Prior to its closure, it was seriously
seeking mergers to comply with the higher capitalization
requirement of the BSP. (ABS/CBN News Channel  05-May-2000)

URBAN BANK: P450-M Pali loan violated banking laws,BSP says
The Bangko Sentral ng Pilipinas is convinced that Urban
Bank Inc. violated banking laws when it lent some P450
million to a property developer two days before it closed

BSP Governor Rafael Buenaventura said Urban Bank was guilty
of "unsound banking practices" because of a loan it
extended to Puerto Azul Land Inc.

"What we were told is that the Pali loan was actually an
obligation of the investment house and, if this is a bad
loan, then investors and depositors of the bank are
prejudiced," he said.

Two days before it went on a bank holiday, Urban Bank
granted a P450-million loan to Pali, an upscale property
developer controlled by the Panlilio family.  Pali is a
cash-strapped company that has suspended some of its

Industry sources revealed that the loan was released on
April 24, the day when Urban Bank officials said
withdrawals reached P800 million before peaking at P1
billion the next day. Three days after Pali got its loan,
the bank shut down. Urban Bank president Teodoro Borlongan
earlier denied that Urban Bank released P450 million to
Pali. He said the bank simply approved the purchase of
Pali's promissory note from its investment arm, Urbancorp
Investments Inc.

Two government financial institutions and the country's
biggest food and beverage conglomerate have said they will
file cases of misrepresentation against Urban Bank.
The Social Security System, Land Bank of the Philippines
and San Miguel Corp. said they were misinformed over Urban
Bank's true financial position, dealing them huge losses.

The SSS, a state pension fund, complained that the value of
its investments in Urban Bank fell because the bank failed
to provide enough information on its financial health. One
of Urban Bank's two biggest shareholders, the SSS bought
2.1 million shares worth P286.65 million in November 1998.
This stake, equivalent to about 15 percent of the bank, is
now worth only P171 million.

Landbank claimed there were irregularities involving P1.05
billion worth of interbank loans it gave Urban Bank while
San Miguel complained that nine of its checks worth P179
million bounced because of Urban Bank's closure.
Borlongan has said Urban Bank's transactions with Landbank
were all aboveboard.  He said in an interview that had
Urban Bank not sought an additional P300 million in clean
interbank loan from Landbank on April 25, the central bank
would have had to clear over P1.3 billion in checks issued
by Urban Bank.

He said by borrowing P300 million from Landbank instead of
availing of the P300 million that the BSP was offering,
Urban Bank spared the central bank from a far larger
liability.  Borlongan explained that Urban Bank borrowed an
additional P300 million in clean loan from Landbank on
April 25 through the interbank market to cover for its
overdrawn position of about P240 million a day earlier.

The loan should have been settled that day had it not been
for Urban Bank's decision to go on a bank holiday effective
the following day.  Borlongan said there was no way for the
bank to have known that withdrawals that day would hit P2

Buenaventura said the Office of the Solicitor General would
consolidate the complaints of the SSS, Landbank and San
Miguel against Urban Bank into a single case. (Philippine
Daily Inquirer  08-May-2000)

VICTORIA MILLING CO.: Fails to bid out 53.35% of stock
Victorias Milling Company, Inc. (VMC) furnished the
Exchange a copy of the "Manifestation" dated March 21, 2000
in its Petition for the Declaration of a State of
Suspension of Payments, for the Approval of the
Rehabilitation Plan, and the Appointment of a Management
Committee, docketed as SEC Case No. 07-97-5693.

In the said document, the Management Committee of VMC (VMC
MANCOM) stated that in relation to the implementation of
its Rehabilitation Plan, the deadline for the submission of
bids expired on March 20, 2000, with no bids being

Accordingly, the VMC MANCOM, in a meeting held on March 21,
2000, declared a failure of bidding of the 53.35% of the
capital stock of VMC and is now considering other options
consistent with the approved rehabilitation plan. In the
meantime, the operations of VMC is continuous and
undisrupted.  (ABS/CBN News Channel  04-May-2000)

WESTMONT INVESTMENT CORP.: BSP asked to pursue case against
A group of investors who invested about P500 million in
Westmont Investment Corp. has asked the Bangko Sentral ng
Pilipinas to investigate former officials of Westmont Bank
for unsound banking practices.

In a letter to BSP Governor Rafael Buenaventura, the
investors, through their lawyers Luis Lokin Jr. and Apollo
Sangalang, alleged that certain officials of Westmont Bank
misled them when they were made to invest in Wincorp.

This is the same group of investors that earlier asked the
Securities and Exchange Commission to investigate Wincorp
and Westmont Bank (now known as the United Overseas Bank)
for allegedly violating the country's securities laws.
They urged the SEC to prosecute "administratively and
criminally" former Wincorp chair John Espiritu, son of
former Finance Secretary Edgardo Espiritu, and other
officials of the investment firm for various violations of
the Revised Securities Act.

The younger Espiritu chaired Wincorp until his resignation
last month. He was also head of Westmont Bank when the bank
gave Wincorp a credit line. The bank's new owners, UOB of
Singapore, cut this credit line in late February this year.
Wincorp, a wholly owned unit of Unioil Resources and
Holdings Corp., arranged some P7 billion worth of loans to
20 companies mostly owned by Espiritu's son and business
allies, particularly Alfonso "Boy" Reyno, the Cua family
and Exequiel Robles. The money came from around 2,000
investors of Wincorp.

It was Westmont Bank's credit line to Wincorp that
temporarily allowed the investment house to settle the
maturing placements of its investors. When UOB took control
of Westmont Bank, the credit line was canceled and Wincorp
ran out of money to pay its investors.

The investors who are seeking to recover the money they
invested in Wincorp claimed that Wincorp and Westmont Bank
violated several banking laws, including the illegal use of
bank branches, facilities and personnel to solicit
investments in securities issued, endorsed and marketed by
an investment house.

"In essence, Westmont Bank, through its top-ranking
officials and concerned employees, specifically its branch
managers, engaged in the active solicitation of investment
placements from the general public. Our clients, relying on
the assurances of their trusted banker, Westmont Bank,
about the short-term and high-yield returns of said
investments, parted with their hard-earned money (that were
safety deposited with said bank) in exchange for
'confirmation advice' documents issued by Wincorp, the
investment arm and sister company of Westmont Bank," Lokin
and Sangalang said.

"These commercial documents, however, indicate that our
clients' funds were not deposited/invested in either
Westmont Bank-UOB or Wincorp. Instead, previously
undisclosed third party "borrowers" appear to be the actual
recipients, with Wincorp merely acting as a "broker"
between our clients and these "borrowers".

Westmont Bank-UOB does not even appear to be a party to
these so-called "no-recourse" transactions yet it was
through its branch offices, facilities and personnel that
these commercial documents were marketed to the public,"
the lawyers noted.

The lawyers stressed their clients had no knowledge or
dealings with the so-called borrowers. They also
averredthat their clients were conditioned by the bank to
believe that the funds were invested in securities
guaranteed or underwritten by Westmont Bank-UOB or Wincorp
as they were never shown the repurchase agreement
prospectus or financial statements of these alleged

"After a thorough background check, these alleged
'borrowers,' who eventually defaulted, 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 lawyers noted. (Philippine Daily
Inquirer  08-May-2000)


BANGKOK METRO.BANK: Sale nears completion
Thailand's banking sector reform has gained momentum now
that Hongkong Shanghai Banking Corp (HSBC) has agreed to
acquire 75 per cent of the nationalised Bangkok
Metropolitan Bank (BMB).

Both parties have agreed to all conditions, but they still
need to work out minor legal issues, said Supachai
Phisitvanich, secretarygeneral of the Finance Ministry.
He did not say how much money the foreign bank would pour
into BMB, but analysts have predicted an injection of about
Bt139 billion.

Supachai, also vice chairman of the Financial Institutions
Development Fund (FIDF), expects to recover between 30 per
cent and 45 per cent of the bank's bad debts.

"We [the finance ministry] believe it will be between 40
per cent and 45 per cent, while the Bank of Thailand thinks
it will be only 30 per cent," he said.

Authorities estimate the bank's nonperforming loans at
about Bt135 billion, equivalent to about 80 percent of its
total loans, he said.  The sale took more than six months
as a price agreement could not be reached. Earlier Cabinet
approval had stipulated that BMB's sale be completed by
last October.

Under the concept of privatising nationalised banks, BMB is
set to be sold under a "covered asset pool". The local bank
would not need to split its bad assets from good assets and
transfer all of them to an asset management company.

Bad assets would stay at the bank and come under the
management of HSBC. Under the loss/gain sharing agreement,
if the bank can generate income from bad asset management,
the funds must go to the FIDF, a significant shareholder in
the Thai bank. But if no income is generated, the FIDF
would compensate the bank.

The FIDF approved the bank's privatisation plan on April 27
and the plan will soon be submitted for final Cabinet
approval. When all contracts are signed, the fund's board
will have to endorse them again. The deal should be
completed by the end of the year.

As of March, BMB's loanloss provision amounted to Bt57.78
billion, or 97 per cent of the total requirement. The bank
still needs another Bt3 billion to fulfil the requirement.
The bank's capital adequacy ratio under the Bank for
International Settlements standard is negative. The bank
needs about Bt24 billion to boost its ratio to 10 per cent
of total riskweighted assets.

As of March, the bank's nonperforming loans were 60 per
cent of total loans, or about Bt100 billion, down from last
year's peak of 80 per cent, said bank president Somchai
Sakulsurarat.  The bank aims at reducing its bad loans to
about 40 per cent by yearend. Total assets account for
Bt160 billion while lendings stand at Bt119.27 billion.
(The Nation  06-May-2000)

IMPERIAL PLAZA CO.: Submits rehab plan
SOCON ENGINEERING: Submits rehab plan
The Central Bankruptcy Court has accepted business
rehabilitation petitions from Socon Engineering and
Imperial Plaza Co and their creditors.

The plan for Socon Engineering was lodged on Thursday by
its lead creditor, BankThai. The metal fabrication and
machinery installation company owes 974.3 million baht to
13 creditors. Chokdi Wongkaew, managing director of Socon,
has been proposed as the planner.

Imperial Plaza Co, operator of the Imperial department
store, owes 2.91 billion baht to 24 creditors. The petition
filed by Bank of Asia proposed Songkram Kitlertphairoj,
managing director of the company, as the planner.  The
court scheduled the first hearing for both cases on May 29.
Also on Thursday, the court approved the rehabilitation
plan of Ban Chang Group Plc. (Bangkok Post  06-May-2000)

PCM PRECAST FLOORS: Following debt restructuring plan
PCM Precast Floors said the issue of 157m new shares,
107.42m to existing shareholders at 3.15bt each and 49.68m
to Anuphong Asavabhokhin, was part of a debt-restructuring
plan. Directors also agreed to acquire 66m shares of Asian
Property Co at the offering price of 2.9bt per share.

As of March 31, total debt owed to four creditors was
149.78m bt in principal and 38.31m in interest.
Restructuring plans with two creditors have been settled
and the other two are under negotiation.

The terms call for repayment over eight years, with a
three-year grace period. Payments will be made at the
minimum lending rate. A vote for shareholder approval is
expected to be held in June. (Bangkok Post  04-May-2000)

STOCK EXCHANGE OF THAILAND: Puts 29 companies on notice
The Stock Exchange of Thailand (SET) said 12 companies had
failed to maintain at least two independent directors and
17 had failed to appoint at least three members to their
audit committees.

The companies have three months to appoint the required
number of directors or face a Notice Pending sign being
imposed. Three months afterward, if no action is taken,
shares will be suspended and liable for delisting.

Companies failing to appoint independent directors are:
Bangkok Steel Industry, Thai Durable Textile, Standard
Chartered Nakornthon, Bijoux D'amour, Sea Horse, S&P,
Natural Park, Thai Gypsum Products, Mandarin Hotel, Siam
Commercial Life Assurance, Bangkok Metropolitan Bank and

Companies failing to meet audit committee regulations are:
United Broadcasting, Jalaprathan Cement, PAE Thailand, Sri
Trang Agro-Industry, Asian Marine Services, Shin Satellite,
Ayudhya Investment and Trust, International Engineering, KR
Precision, S&P, Natural Park, Book Club, Siam Panich
Leasing, Premier Enterprise, Samitvej, Tipco and Siam
Commercial Life Assurance. (Bangkok Post  04-May-2000)

THAI TEL.AND TEL.PLC: Company, creditors seek rehab
Thai Telephone and Telecommunication Plc (TT&T), the
provincial fixed-line provider, and most of its creditors
have agreed to seek a Central Bankruptcy Court ruling on
its business rehabilitation plan.

Creditors also agreed to recommend TT&T as the planner,
president Thongchat Hongladaromp said yesterday. A court
hearing is scheduled for Monday and the rehabilitation plan
is expected to be drafted within four months. After that, a
debt-restructuring agreement will be signed and the new
partners will participate in a five-billion-baht capital
increase. The company owes 44.36 billion baht in debts.
(Bangkok Post  04-May-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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