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                           A S I A   P A C I F I C

             Friday, May 12, 2000, Vol. 3, No. 93


* A U S T R A L I A *

AUSTRALIAN SUBMARINE CORP.: Gov't decisions to impact
PACIFIC DUNLOP: Exide to buy GNB unit
TELSTRA: Treasurer's dividend doubts sink stock

* C H I N A  &  H O N G  K O N G *

SIU-FUNG CERAMICS: Curtain falls on debt saga
S. MEGGA INT'L HOLDINGS: To re-fi HK$482M debt,change name

* I N D O N E S I A *

IPTN: Indonesia asks China to help ailing IPTN, buy LNG
PT ASTRA INT'L: Cycle & Carriage seeks stake increase
PT CHANDRA ASRI: Marubeni to swap $100M credit for equity
PT SMART CORP.: Restructures US$45M loan

* J A P A N *

POKKA CORP.: Stock in free-fall
SHISEIDO: Warns of first loss in 55 years
VICTOR CO.OF JAPAN LTD.: Suffers big group loss

* K O R E A *

DAEWOO MOTOR: GM steps up drive for Daewoo
DAEWOO MOTOR: GM invites Korean creditors as stakeholders
DAEWOO MOTORS: GM affirms Daewoo staff safe
DAEWOO MOTOR: Hyundai Motor tie-up with Ford unlikely
KIA MOTORS: Fighting W372B tax on write-offs
KOREA EXPRESS: Seeks court aid to clear debt to parent
SAMSUNG GROUP: Court suspends father-to-son power transfer

* M A L A Y S I A *

LINGKARAN TENGAH: UEM says road unit in default of loans
PAN PACIFIC ASIA: OSK threatens action for aborted sale
TIME ENGINEERING BHD: Creditors' adviser favors SingTel

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

ASB HOLDINGS: SEC probing 'loans', urges DOF tax probe
LINTEX INT'L: Shuts operations in Philippine zone
MAXRICH INC.: Shuts operations in Philippine zone
PB COM: Pays P2B in emergency loans
SUNBURST GARMENTS CO.: Shuts operations in Philippine zone
URBANCORP INVESTMENT INC.: SEC orders under receivership

* T H A I L A N D *

BURAPA STEEL: Bankruptcy Court accepts rehab petition
ISA CO.: Bankruptcy Court accepts rehab petition
NARONG CANNING CO.: Bankruptcy Court accepts rehab petition
RAIMON LAND: Debt plan `sound'
SAHAVIRIYA OA PLC: Reports progress on reorganization plan
THAI TEL.& TEL.: Court accepts rehab petition


AUSTRALIAN SUBMARINE CORP.: Gov't decisions to impact
The Federal Government has been warned it has six weeks to
make decisions crucial to the survival of the Adelaide-
based Australian Submarine Corporation.

The Osborne site and 700 jobs appeared doomed if the
Government failed to quickly resolve ASC ownership issues
and award it submarine maintenance contracts worth up to
$100 million each, corporation managing director Hans Ohff
said yesterday.  The company's $5 billion contract to build
six diesel-electric Collins-class submarines is 97 per cent
complete and no further, lasting work has been authorised.

"If there is no decision made and the Government does not
make a decision to bring forward a refit of the submarines
in South Australia by not later than September or October
this year, then we will have to reduce the workforce to a
level where the company becomes sub-critical," Mr Ohff

"In other words . . . we have lost our intellectual
capacity to properly serve our clients," he added. "If (the
Government) can get all this through inside six weeks, and
a decision is made then, all is not lost."

The company's future is in limbo because contracts cannot
be awarded until the Federal Government decides who will be
the owner.  The Government, which owns 48.45 per cent of
ASC, stepped in last month to stall moves by majority
owner, Swedish-owned SAAB, to sell its share to German
submarine-maker HowaldtswerkeDeutsche Werft (HDW). The
Government now is talking to HDW and United States
submarine builder General Dynamics Electric Boat over their
plans and commitment to using the Osborne site.

Last month, two ASC directors appointed by the Federal
Government warned in a report that "procrastination" over
shareholding issues for the past two years meant that the
company lacked direction and a guaranteed future.  Cash
reserves were falling, key staff were leaving and morale
was "chronically low", the report said.

The corporation announced on Tuesday it would sack 69 blue-
collar workers within six weeks.  Up to 40 white-collar
staff are expected to follow and up to 300 more jobs could
be slashed by September.  A spokesman in Adelaide for the
Australian Defence Forces told The Advertiser yesterday
that the company would be given a "substantial amount" of
the $128 million funding announced in Tuesday's Federal

The funding would be used to bring two of six Collins-class
submarines up to operational standards.  But Mr Ohff said
more work was essential.  The ASC's final submarine, HMAS
Rankin, is nearly complete and requires minimal staff to
finish it for an expected handover to the Royal Australian
Navy by July next year.

With the RAN understood to support submarine maintenance
being undertaken at its Western Australian base, ASC
survival hopes hinge on winning one or more refitting and
upgrading contracts.  Mr Ohff said if no new work was
forthcoming, the $150 million taxpayer-funded site would be
forced to close.  "We would probably shut the door, turn
the lights off and grow mushrooms," he said. (The
Advertiser  11-May-2000)

PACIFIC DUNLOP: Exide to buy GNB unit
Exide, the world's largest maker of automotive batteries,
has agreed to buy Pacific Dunlop's US battery unit for
A$630 million (HK$2.85 billion), ending a one-year search
by the financially challenged Australian company to sell
the unit.

Pacific Dunlop, a maker of everything from condoms to auto
parts, said Exide will pay A$570 million in cash and A$60
million in stock for GNB Technologies. The sale will give
Pacific Dunlop an 18 per cent stake in Exide, making it the
company's second-largest shareholder. Its shares surged 13
cents, or 9.1 per cent, to A$1.56 -- its biggest one-day
gain in more than a decade.

Pacific Dunlop's sale of GNB "is one of the triggers that
we've been expecting, and it should start generating a
little more confidence in the group going forward," said
Pano Raftopoulos, who manages A$600 million in Australian
equities at Challenger Professional Investment Management.

Melbourne-based Pacific Dunlop has been trying to revamp
its diversified business over the past few years, focusing
on expanding the profitable Ansell brands and distribution
units, and shedding badly performing operations.

It terminated talks to sell GNB to closely held Quexco in
June last year after the US-based company had trouble
raising the agreed US$500 million (HK$3.9 billion) price.
The failure to sell GNB has helped drive down Pacific
Dunlop's shares by about 44 per cent since the Quexco sale
fell through. The proposed sale of GNB to Exide is still
subject to due diligence, regulatory review and financing.

Pacific Dunlop shares, which reached a record high A$5.92
in February 1994, have been hovering around 14-year lows
over the past six months, as investors grow impatient for
news on slated asset sales and improved earnings. It fell
as low as A$1.37 last month, its lowest level in more than
14 years.

That's led to market speculation that Pacific Dunlop may be
the target of a takeover. Australian media reports said
that billionaire Kerry Packer and other partners may be
moving to take a large stake in the company. Disney's
Shamrock Holdings, investment company Kohlberg Kravis
Roberts and Melbourne businessman Solomon Lew may also be
interested in acquiring a holding in the company, reports

The exiting of GNB "represents the sale of a non-core
business and replaces it with cash and an equity investment
that can be better used to the advantage of shareholders,"
said Rod Chadwick, chief executive at Pacific Dunlop,
adding that Federal Trade Commission approval of the sale
is expected by September.

Mr Chadwick said the company's investment in Pennsylvania-
based Exide "will increase in value because of the
synergies" expected between both businesses. The sale will
result in a further write down in the value of the
investment of about A$160 million.

Atlanta-based GNB, which Pacific Dunlop bought in 1987,
makes and sells batteries worldwide under brand names such
as Champion, Absolyte and Marathon. The unit has been
struggling since 1995 when the company opened its lead
smelter in Columbus, Georgia. The smelter, one of 18 GNB
plants in the US, hasn't met its full capacity of 90,000
metric tonnes a year.

GNB, one of five units of Pacific Dunlop, posted an
operating profit of A$51 million on sales of A$1.4 billion
in the year to June 30 1999. It reported a 3 per cent fall
in profit to A$30 million in the six months to December 31,
1999 because of increased competition.

"While this transaction is still subject to careful
examination, the potential acquisition of GNB makes
tremendous strategic sense and is a significant step in our
remaking of Exide as the world leader in stored electrical
energy," said Robert Lutz, chief executive at Exide.

He said the combined business will provide a bigger range
of products through a much more efficient distribution
system. Exide had sales of almost A$2.4 billion in calendar
1999.  Pacific Dunlop also said it wants to sell its
Australian and New Zealand-based electrical distribution
business, with sales of more than A$800 million a year.
(Hong Kong Standard  11-May-2000)

TELSTRA: Treasurer's dividend doubts sink stock
Telstra shares plunged again yesterday after the Treasurer,
Mr Costello, raised doubts on Budget day over the company's
future level of dividends.

The Australian Stock Exchange asked Telstra for an
explanation after Mr Costello told reporters before his
Tuesday Budget speech that the company had given the
Government "very bad news" on future dividend payments.

Telstra's ordinary shares fell to an 18-month low of $6.49
yesterday before closing 9c down at $6.61. The T2
instalment receipts hit a new low of $3.53, nearly $1 below
their $4.50 issue price last October, but partially
recovered to finish 6c lower at $3.66.

Telstra added to the concern yesterday when it said that
its final dividend this financial year would be subject to
a number of "commercial factors."  Reduced dividend
payments may make it difficult for many smaller
shareholders to fund their second instalment payment for
T2, due in November.

A lobby group for small investors, the Australian
Shareholders Association, also expressed concern to the ASX
yesterday that Mr Costello's comments may mean reduced
future Telstra dividend payments.  The Treasurer's remarks
highlighted the Government's controlling 50.1 per cent
shareholding in Telstra, which enables it to obtain
privileged information and leaves it open to charges that
the company is not being run for the benefit of all

These concerns, coupled with doubts about Telstra's
expansion plans in Asia and last week's elevation of the
company's deal-maker Mr Ted Pretty, continue to be a drag
on Telstra's share price.  At the same time, Telstra
continues to lose market share in each of its main markets
of local calls, mobiles and long distance calls.

Telstra's public relations team went into damage control
yesterday, telling stockbrokers that Mr Costello's comments
had been misinterpreted.  The company said it intended "to
declare ordinary dividends of at least 60 per cent of
operating profit attributable to shareholders, subject to
taking into consideration a number of commercial factors."

But stockbrokers said this prompted doubt about whether the
dividends may be reduced given Telstra's $5 billion
commitment to its joint venture with Mr Li's Internet group
Pacific Century CyberWorks in Hong Kong, on top of its $4
billion annual capital expenditure bill.  As well, Telstra
faces paying more than $1 billion for its share of the
third-generation mobile phone spectrum.

A spokesman for Mr Costello said the Treasurer had been
referring to the fact that overall dividends to the
Government were forecast to decline by 66 per cent in the
coming financial year.  This was due in part to the fact
that the Reserve Bank's dividend was much lower than
forecast and that Telstra had paid a special dividend to
all shareholders in the last financial year.

The Prime Minister distanced the Government from any
responsibility for Telstra's share price fall. "I think ...
I am not responsible for the share price of Telstra any
more than I am responsible for the share price of BHP or
anything else," he said on Radio 2GB. (Sydney Morning
Herald  11-May-2000)

C H I N A  &  H O N G  K O N G

SIU-FUNG CERAMICS: Curtain falls on debt saga
Siu-Fung Ceramics is to be wound up after more than three
years of botched rescue attempts, with creditor HSBC
unwilling to entertain a last-ditch bid to restructure
debts of HK$2.4 billion.  Chairman Siegfried Lee Siu-fung
blasted the bank for "punishing" the company, dubbing the
move as "political".

"If Hongkong Bank don't like it, they just punish, they
don't care about small shareholders. Every company chairman
should listen carefully," he said.

The roller-coaster of Siu-Fung rescue attempts continued to
the bitter end, with a proposal involving Golik Investments
hand-delivered to the High Court just moments before
yesterday's hearing.  A non-refundable deposit of HK$5
million would have been paid instantly and a further HK$25
million on completion of the restructuring, counsel for
Siu-Fung, barrister Paul Carolan, told the court.

"HK$30 million in one's hand is better than nothing," he
stressed, imploring Mr Justice Andrew Chung On-tak to grant
a four-week adjournment to flesh out the latest plan.

HSBC had however argued that "enough is enough" and pressed
the judge for winding-up orders to be made against Siu-Fung
Ceramics Holdings, and its three main subsidiaries: Siu-
Fung Ceramics Concept Co, NHD Systems (Asia) and NHD
Systems (Holdings).  Moreover, the bank argued that the
eleventh-hour rescue attempt would never get off the ground
without its support. HSBC bore 60 per cent of the company's
total indebtedness.

For a restructuring attempt - in the form of a scheme of
arrangement - to succeed there would need to be at least 75
per cent support from creditors.

"Taking into account the history of these proceedings, I
don't find that the petitioner [HSBC] can be criticised for
not agreeing," the judge ruled.  "I consider that my
discretion should be exercised in refusing the application
for adjournment and granting the winding-up orders sought."

Speaking after the ruling, Mr Lee lamented the HK$150
million he had personally pumped into the company. "I
tried my best for all the shareholders. I gave up
everything to help the company, but in the end, one thing
really destroys me, no-one else was funding their own

The court had heard that Mr Lee had been willing to waive
debts owed to him by the firm in order to salvage it
through restructuring.  Negotiations to restructure the
company first started in October 1996 when its German
subsidiaries went into liquidation.  However, a series of
restructuring flops left HSBC at the end of its tether, the
court heard.

Debts of at least HK$1.3 billion were owed to the bank -
the company's largest creditor.  Shares in the firm have
been suspended since October 1996 and it has a mere
HK$100,000 in assets frozen in bank accounts since winding-
up petitions were presented by HSBC last March.  The bank
had however held off filing the winding-up petitions for a
number of years, as various rescue proposals emerged.
(South China Morning Post  10-May-2000)

S. MEGGA INT'L HOLDINGS: To re-fi HK$482M debt,change name
S Megga International Holdings Ltd said it plans to
refinance its HK$428 million debt and change its name to
Wireless InterNetworks Ltd to reflect its future focus on
wireless applications.

The company said it is proposing to issue 3.82 bln shares
to financial creditors at 0.109 hkd per share, adding that
its creditors including banks and existing note holders.
Of these 3.82 bln shares, existing S. Megga shareholders
will be entitled to acquire a minimum of 584.9 mln on the
basis of one new share for for every two shares held, it
said, adding that the shares will be offered at for 0.045
hkd each.

"This claw back is intended to reduce the dilution impact
on the shareholding of existing shareholders," the company

Under the modified debt restructuring proposal, the company
proposes the issuance of 60 mln hkd non-interest bearing
secured 3-year convertible notes which can be converted
into S Megga shares at 0.02 hkd each.  It also proposes
issuing 30 mln hkd of non-interest bearing secured 7-year
mandatory convertible notes which can be converted into S
Megga shares at 0.109 each.

The statement said 34.7 mln hkd of the 60 mln 3-year
convertible notes will be issued to bank creditors and the
balance will be issued to outstanding note holders.  It
said 17.4 mln hkd of the 30 mln 7-year convertible notes
will be issued to bank creditors with the balance issued to
existing note holders.  The debt restructuring proposal is
subject to contracts with the financial creditors, it said.
(World Reporter  09-May-2000)


IPTN: Indonesia asks China to help ailing IPTN, buy LNG
Indonesia has asked China to help its ailing national
aircraft manufacturer, IPTN, through a joint investment,
Minister of Foreign Affairs Alwi Shihab said here on

"The market here is quite big and they have advanced
aviation technology," Alwi told Indonesian journalists
after attending a reception to celebrate the 50th
anniversary of diplomatic relations between Indonesia and
China.  "Besides, China has the money," he added.

Earlier on Tuesday, Alwi met Chinese Vice President Hu
Jintao to discuss how Chinese aid to Indonesia could be
translated into an "actual" and "practical" way.  Alwi said
that China gave a positive response to the idea of the
joint investment in IPTN.

"IPTN now has problems, while China has a big market. This
can be a healthy combination. What's more, we already have
the factory," he said.

Indonesia and China opened its diplomatic ties in 1950 but
it was frozen in 1967 two years after an abortive communist
coup which Indonesia then claimed involved China. The
relations were normalized in 1990.  Some Middle Eastern
countries had shown their interest in IPTN, but they always
asked about the market, he said.

Alwi also proposed that China buy Indonesia's liquefied
natural gas (LNG). "Why should they buy LNG from the Middle
East if they can buy it from us."

China is expected to increase its investment in Indonesia,
which represents only 0.15 percent of its total investments
worldwide.  Alwi said that China was committed to providing
export credit worth a total of US$500 million, but so far
it had not been realized because of "insignificant
technical matters."  Among them is a high exposure fee.

China has agreed to reduce the fee but Indonesian
businesses still consider the procedures to access the
credit too rigid. "We can buy goods which are cheaper here
than in the U.S. or Europe," he added.

He said that up to now, China's investment in Indonesia was
low because of "psychological" obstacles. "Maybe there are
some of us in Indonesia who are still reluctant to be all-
out, but now that we have good relations with China, there
should not be any more obstacles.  China won't interfere in
our internal affairs, and they have quite big potency."

He said China would be ready to help Indonesia restore its
economy if Indonesia could create a climate that was
conducive to investment, Alwi said.  "The Chinese vice
president himself said this. It is not diplomatic talk. It
came from his heart," he assured.

China was the first country officially visited by President
Abdurrahman Wahid after he took power last October, which
was followed up on Monday by the signing of a Memorandum of
Understanding (MOU) on bilateral cooperation in the fields
of politics, economics, science and technology and tourism.

Another document, concerning a joint commission to settle
any problems that might emerge during the cooperation, was
also signed at the same time. Alwi said that China had
agreed to declare Indonesia a tourist destination.

Indonesia now has a great opportunity to tap into the
tourist market in China and to encourage Chinese people to
travel to this country. This is due to the easing of the
bureaucracy in applying for visas. The government may, if
necessary, also reduce the visa fee. The President has
authorized the Indonesian Embassy to issue visas without
any clearance from Jakarta.

"In the end, we might give them visas on arrival," Shihab

This policy, however, should be supported by the
improvement of the immigration department in Indonesia. He
admitted that the immigration officers often were
suspicious about Chinese who planned to travel to Indonesia
and were prejudiced that they would abuse their visas and
become illegal immigrants in the country. Alwi also rebuked
corrupted immigration officers who abuse their power and
called them to clean up their acts.  Indonesia and China
will also make an agreement on criminal matters, including

"In the future, there should not be matters like the Edy
Tansil case," he said, referring to corrupted businessman
Edy Tansil, who is believed to have fled to China. (Jakarta
Post  11-May-2000)

PT ASTRA INT'L: Cycle & Carriage seeks stake increase
Cycle & Carriage Ltd. is negotiating to buy the 4% stake
that Lazard Fund Asia holds in Pt Astra International of

"Lazard indicated in writing that it wants to sell its
stake in Astra, and we are in discussions," with Lazard,
said Neville Venter, finance director of Singapore-based
Cycle & Carriage. Lazard's stake in Astra totals 103
million shares.

Cycle & Carriage currently owns a 23% stake in the
Indonesia auto maker.  Lazard belongs to the five-member
consortium, led by Cycle & Carriage, that bid successfully
for a 40% stake in Astra for US$506 million in March.

Cycle & Carriage is likely to sign a sale-and-purchase
agreement early next week, Mr. Venter said. The purchase
price "isn't far from 3,700 rupiah (US$461.92) per share,"
he said, adding that the acquisition will be financed
through bank borrowings.

The consortium members - which also include the Government
of Singapore Investment Corp., Bhakti Investama and Batavia
Investment Fund - have first right of refusal in any sale
of Astra shares by fellow members. (The Asian Wall Street
Journal  10-May-2000)

PT CHANDRA ASRI: Marubeni to swap $100M credit for equity
Japan's Marubeni Corp. (8002) will waive about 100 million
dollars in debt owed by PT Chandra Asri, a petrochemicals
joint venture with the Indonesian government, sources with
the trading house said Wednesday.

Marubeni hopes the debt-for-equity swap will help the
ailing Indonesian firm to turn around operations. The
trading house owns a 21.2% stake in Chandra Asri with most
of the remainder held by the Indonesian government.

Indonesia's largest petrochemicals producer owes 700
million dollars to Marubeni. The Indonesian government is
also expected to waive debt worth 400-500 million dollars
in return for an equivalent amount in shares, the sources
said.  The firm's capital will be subsequently reduced to
wipe out the remainder of Chandra Asri's 700 million
dollars in cumulative losses.

There has been fierce wrangling between Marubeni and
Jakarta over how the costs of turning Chandra Asri around
should be shared.  Chandra Asri is capitalized at 1.05
billion dollars and operates a plant that can produce up to
510,000 tons of ethylene annually. The company's annual
losses once topped 100 million dollars due to high
production costs and a drop in ethylene prices.

The government aims to sell part of its stake in the
company to oil giant BP Amoco.  Marubeni, which earlier set
aside 30-40 billion yen in reserves to cover any loan loss
involving the Indonesian joint venture, believes the rescue
agreement will not affect its overall earnings. (Nikkei

PT SMART CORP.: Restructures US$45M loan
Publicly listed integrated crude palm oil (CPO) company
PT Smart Corp. has reached a two-and-a-half year
refinancing agreement with 11 foreign creditors for its
US$45 million syndicated loan that matures on Wednesday.

Smart's senior managing director Tan Siauw Liang said on
Monday that foreign banks were "very comfortable" with the
company's strong future cash flow, which was more than
sufficient to fully repay the syndicate by October 2002.

"The refinancing marks another major milestone for the
company. It reaffirms the high credit rating and confidence
of the international banking community toward solid
Indonesian companies," Tan said.

The 11 syndication banks include ABN-AMRO, Credit Industrie
et Commercial, DKB, Fuji Bank, Hiroshima Bank, ING,
Rabobank, Sanwa Bank, Sakura Bank, SG and Yamaguchi Bank.
Rabobank acted as financial adviser to the transaction.
Smart, a fully integrated CPO plantation and refinery
operation, is a unit of Singapore-listed Golden Agri
Resources, a holding company controlled by the Indonesian
Sinar Mas Group.

The company's plant in Surabaya, East Java, has a
production capacity of 1,400 tons of CPO per day, while the
Belawan facility in North Sumatra has a production capacity
of 800 tons of CPO per day.  The Surabaya facility also has
a capacity to produce 600 tons of margarine per day, while
Belawan's capacity is 300 tons.

Tan said that 60 percent of the Surabaya facility was used
to produce branded cooking oil, while the remainder was for
nonbranded cooking oil. He said that starting this year
Smart was planning to open some 10,000 hectares of new CPO
plantations per year over the next three years in East

"The refinery's capacity is greater than the supply of raw
materials from our own plantations," he said.

Tan said that the company was well positioned to benefit
from the growing global and regional demand for palm oil.
He pointed out that as of the end of December last year,
the company's plantations covered approximately 88,227
hectares, of which 47,846 was already mature.

"The full 88,227 hectares will mature in three years, which
will allow the company's internal CPO production to jump
from 162,340 metric tons in 1999 to the company's estimated
figure of over 350,000 metric tons by 2002," Tan said.

He said the benefits from the higher CPO production would
be further boosted by an anticipated recovery in
international CPO prices to above $400 million per metric
ton.  He added that for 2000 the company estimated export
sales to generate around 30 percent of its revenues.
Smart is the country's second largest cooking oil
manufacturer with a 34 percent domestic market share. Its
market share in 1998 was only around 29 percent.

The company reported a net profit of Rp 139 billion in
1999.  The company's net outstanding debt as of the end of
1999 was around $110 million.  Tan said the company might
need more external money to help finance its expansion
program.  He said the company had considered raising money
through the bonds market, but had yet to decide when to
launch the bonds.

The debt restructuring deal reached by Smart also marked a
milestone in the restructuring effort of the country's
massive $70 billion corporate sector overseas debt. Only a
handful of local companies have been able to restructure
their overseas loans.

Restructuring the corporate sector debt overhang is crucial
to revive foreign investor confidence in the crisis-hit
economy.  The government has said that it is considering
providing incentives including tax breaks to encourage
debtors and creditors to immediately reach a restructuring
agreement. (Jakarta Post   09-May-2000)


Merrill Lynch Japan Securities Co. posted a pretax loss of
22.4 billion yen for the year ended March 31 despite strong
share trading and increased sales of investment-trust

Operating revenue effectively jumped 330% from a year
earlier to 19.7 billion yen, thanks to the active stock
market and interest in investment trusts, even though the
company had an irregular nine-month term through March
1999. But operating expenses rose 9% to 39.9 billion yen
because of a bigger payroll, the adoption of a merit pay
system and training of new sales staff.

The number of sales personnel stood at 1,100 after the
company took over the branches and some employees of failed
Yamaichi Securities Co. in July 1998. The figure rose to
1,200 at the end of March.  The subsidiary, wholly owned by
Merrill Lynch & Co. of the U.S., posted a net loss of 7.4
billion yen.

It is aiming to post profit in the year ending March 2003,
President Ronald Strauss said. The company intends to begin
online stock trading by the end of this year. Merrill Lynch
Japan Securities is trying to increase client assets held
long-term in custody. The balance of such assets had
increased 210% to 1.37 trillion yen at the end of March,
and the number of the accounts had risen 110% to 82,000.
(Nikkei  08-May-2000)

POKKA CORP.: Stock in free-fall
Shares of Pokka Corp. (2592), a Nagoya-based manufacturer
specializing in soft drinks, have been falling with no end
in sight.

News of an alliance with Nestle Japan Ltd. boosted the
company's share price to 635 yen on Feb. 18, its highest
level for this year, but by April 28, Pokka shares had
fallen to 438 yen, their lowest level since October 1997.
In thin volume, the shares seemed unable to absorb selling
pressures from individuals and unwinding of cross-

The main reason for the stock's decline is the company's
poor earnings performance. Pokka initially forecast a
return to profit on a pretax basis for fiscal 1999, but it
now appears that it will record a loss three times the size
of the loss seen in fiscal 1998.  Pokka launched its new
"Got it!" canned coffee product in summer 1999, but sales
have fallen 2 billion yen short of projections.

This fiscal year, the company is putting special emphasis
on the growth business of food products, but analyst Yoko
Mizoguchi at Tokai Maruman Research Center says Pokka "has
an urgent need to do something about its main business:
coffee beverages."

Coffee is outside the bounds of the partnership with Nestle
Japan. "At present, the outcome is unclear," says a Daiwa
Institute of Research analyst. The company's price book-
value ratio is well below par at 0.45. "Even at this level,
we cannot say the stock looks cheap," the analyst says.

Key to a revival of the stock price will be the company's
formulation of a growth strategy based on its new ties with
Nestle Japan, market participants say. (Nikkei  10-May-

SHISEIDO: Warns of first loss in 55 years
Shiseido, Japan's largest cosmetics company, on Tuesday
warned that it would this year post its first loss in 55
years, as it writes off a Y70bn ($642m) pension and
retirement reserve shortfall.

The move, prompted by changes in accounting regulations,
follows similar steps by other leading companies such as
Toshiba and Fujitsu, the electronics companies, and Nomura
Securities, the biggest broker.

Shiseido will be covering its shortfall with Y41B of pre-
tax profits excluding exceptionals it forecast for the
current business year which ends next March. The group
posted pre-tax profits excluding exceptionals of Y40B last
year, up 18 per cent from the previous year.  Group net
profit was up 48 per cent at Y15.3bn but sales fell 1.3 per
cent to Y596.6B.

The company blamed a strong yen, which depressed overseas
sales figures. Overseas sales rose 12.7 per cent in local
currency terms. Domestic sales slipped 0.3 per cent due to
poor toiletries sales but Shiseido managed to raise
slightly its domestic cosmetic sales despite Japan's poor
retail environment.

Sales of men's cosmetics were down, partly due to a sharp
fall in demand for male hair-growth treatments. In
contrast, sales of other specialised brands such as Serum
Noir, its new hair-growth treatment for women, rose
sharply, and helped total cosmetics sales rise 0.4 per

Shiseido predicted group sales would pick up this year,
forecasting a 4 per cent rise to Y620B. The group stressed
its commitment to raising its international profile by
reorganising and strengthening its regional headquarters
and subsidiaries in Europe, the Americas and Asia. The
group also said it would continue its strategy of spinning
off divisions.

Shiseido spun off its health and beauty foods arm last
month, and plans to spin off its toiletries operations in
October.  Shiseido's shares fell 2.5 per cent, or Y38, to
Y1,466. (Financial Times  09-May-2000)

VICTOR CO.OF JAPAN LTD.: Suffers big group loss
Victor Co. of Japan Ltd. (JVC) Tuesday announced a big
group loss in the year to March 31, blaming subsidiary
closures, weak sales and the yen's rise against the dollar.

JVC suffered a consolidated pre-tax loss of 8.43 billion
yen (80 million dollars), reversing a profit of 546 million
yen a year earlier.

"This large loss was due in part to the liquidation of
subsidiaries and affiliates that the company began last
year and also in part due to falling market prices and the
stronger yen," the company said in a statement.
Net losses came to 5.34 billion yen against the year-before
loss of 8.31 billion yen.

The net loss shrank thanks to gains booked on shares held
by its US subsidiary, but JVC was still burdened with extra
outlays for a special retirement fund and business
restructuring, it said. Sales fell 8.1 percent to 870.23
billion yen. (Agence France-Presse  09-May-2000)


DAEWOO MOTOR: GM steps up drive for Daewoo
Having failed once to buy Daewoo Motor Corp. in a process
that has taken on nationalistic overtones, General Motors
Corp. is stepping up its efforts to counter rivals who
insist that the failed automaker stay in Korean hands.

General Motors' chairman, Jack Smith, on Wednesday chided
Hyundai Motor Co., part of the biggest South Korean
business conglomerate, for opposing the efforts of GM and
other foreign companies to take over Daewoo.

"They're trying to sell their cars in all the markets of
the world," said Mr. Smith, who was here for the opening of
a showroom for GM luxury cars and for two days of
conversations with senior government officials aimed at
pressing GM's bid. "They've had a chance on a world scale,"
he said, suggesting that GM should be given a similar
opportunity to compete in South Korea by buying Daewoo.

GM failed in its initial bid for Daewoo after Hyundai Motor
executives protested that the sale of the company to a
foreign manufacturer would destroy South Korea's indigenous
motor-vehicle industry, which Hyundai dominates. Hyundai
has maintained that foreign manufacturers in general, and
GM in particular, represent a threat not only to local
manufacturers but also to a network of suppliers and

"If foreign makers take over Daewoo, the domestic car
industry would fall apart," a Hyundai spokesman said. "When
you look at GM's experience in acquiring foreign companies,
that did not help the domestic industry."

Despite memories of a troubled alliance between General
Motors and Daewoo that ended in 1992, GM describe the
company's renewed interest as an integral part of GM's
strategy to capture a greater share of the rapidly growing
Asian market.

"The region's long-term growth potential still exceeds that
of North America and Europe combined," Mr. Smith said.
"Every major player in the global auto industry would like
to be involved in that growth."

He portrayed GM's interest in Daewoo as part of "a chain
reaction of activity" as the automotive industry
consolidates, a process begun by the combining of Daimler-
Benz AG and Chrysler Corp. into DaimlerChrysler AG in 1998.
GM itself has expanded considerably in Asia, acquiring
Japanese companies such as Isuzu, Suzuki and Fuji Heavy
Industries, which manufactures cars under the Subaru name.

But Daewoo would be a bigger addition. The company's plants
- in addition to South Korea, it has operations in Asia and
Eastern Europe - can produce about 2 million cars a year.
The company's aggressive expansion, analysts say, was one
of the key reasons for its downfall under a massive debt
burden. It is also said to be one of the main reasons GM
and Daewoo, in which the American company once owned a 50
percent stake, parted ways in 1992.

"The partners had conflicting views on capacity expansion,
debt leverage, profitability objectives and marketing
issues," Mr. Smith said "Neither company was perfect, of
course. Both made mistakes, but I think we have learned
from our difficulties and developed a global alliance
strategy that is working well for GM and its partners."

Mr. Smith sought to assure South Koreans of his desire to
keep Daewoo intact as a relatively autonomous local
operation rather than turn it into an assembly operation
for GM-designed vehicles, as some critics have said it
intends. He said all Daewoo's factories would be kept open,
an effort to head off union concerns about possible job
cuts after a sale of the company.

Mr. Smith said, however, that he still did not have a clear
idea of the real value of the company, and he called for
government moves to increase transparency in business

The race for Daewoo Motors - DaimlerChrysler, Fiat SpA and
Ford Motor Co., as well as Hyundai, are known to be
interested in the company - has inspired some unusual
tactics as the contenders attempt to show their viability.
Last weekend, Hyundai announced that it was planning to
build a small "world car" in cooperation with
DaimlerChrysler and Mitsubishi Motors Corp. of Japan.
DaimlerChrysler quickly denied the existence of such a

Mr. Smith sought to play down speculation that GM might
enter into a joint bid for Daewoo with Hyundai, a strategy
believed to have been contemplated by both Ford and
DaimlerChrysler.  "We've been looking at it as a separate
entity," he said.

Mr. Smith said, however, that Hyundai would have no problem
joining an alliance with a foreign company if necessary to
survive on foreign markets.

"If it wants a partner, it can pick a partner," he said. "I
don't see them being disadvantaged in this global world."
(The International Herald Tribune  11-May-2000)

DAEWOO MOTOR: GM invites Korean creditors as stakeholders
General Motors Corp. of the United States, a leading bidder
among five Korean and foreign auto makers for Daewoo Motor
in an international tender, has invited its Korean
creditors to take a stake, should GM win the bid.

During a speech to the Federation of Korean Industries and
American Chamber of Commerce at Seoul's Hilton Hotel
yesterday, Jack Smith, GM chairman and chief executive
officer, said, "If our proposal is adopted, we would also
expect that Daewoo's Korean creditors would become equity
partners and share in the rewards of growth."

This invitation is interpreted as GM's confidence in the
ongoing bid as well as intended as a message asking in
advance the participation of creditors in its takeover,
which could lower the risk of making a huge investment in
Daewoo and cushion the public's animosity in the event that
a foreign company emerges as sole owner.

Smith made this invitation while explaining his strong
confidence in the growth of Daewoo as an unique and
individual identity under the GM wing.

"Our vision also includes preserving Daewoo's unique Korean
identity in Korea. We want to grow Daewoo's business as a
Korean manufacturer, which is good news for all employees
and suppliers," he said.

At a morning press conference Smith held jointly with his
top lieutenants, GM said it will use Daewoo Motor's
research and development capability to develop low-cost car
platforms for developing countries in Asia and around the

"Daewoo's Matiz provides us an opportunity for the
production of a low-cost world car," said Rudy Schlais,
head of GM's Asia-Pacific operations, "but we must focus on
the individual needs of the company so there will be a base

The world car has been the topic of the domestic industry's
scuttlebutt in the aftermath of a unilateral announcement
made by Hyundai Motor, sole domestic bidder for Daewoo,
that it agreed with Mitsubishi Motors of Japan and its
major shareholder DaimlerChrysler AG on joint development
and marketing of a world car with an engine displacement of
1 to 1.5 liters, a claim the two companies have so far
denied.  (Korea Times  10-May-2000)

DAEWOO MOTORS: GM affirms Daewoo staff safe
General Motors pledged to keep Daewoo Motor operating as a
Korean company and retain all its factories, in a bid to
win support for a takeover of the bankrupt car-maker.

GM chairman Jack Smith told a press conference in Seoul the
world's biggest car-maker would also develop new car models
with Daewoo Motor aimed at Asian markets.  Mr Smith's
effort to woo backers for the bid comes about seven weeks
before the deadline for submissions set by the bid
organising committee.

"They look smart in dealing with interests involved in the
on-going competition," said Han Kum-kee, a Seoul-based car
analyst at Merrill Lynch Global Securities.

GM is vying with four other car-makers to snap up South
Korea's second-biggest car-maker and gain entry to one of
Asia's most closed markets.  Yesterday's comments echo
promises by Ford Motor and other possible bidders in recent
weeks, aimed at defusing opposition to a foreign takeover
of Daewoo Motor.

The victor, likely to be announced in September, may find
union protests the hardest to quell. Car workers staged
all-out strikes last month, to block the sale of Daewoo
Motor to foreigners. They fear big job cuts.  GM's promise
not to shutter any of Daewoo's plants may go some way to
calming the unions.

"We have no plans to close down any of Daewoo Motor
operations in Korea or overseas," Mr Smith said.

The unions want details. "Only if the foreign car-maker
shows concrete plans to retain those plants will we have
reason to halt our protests against a foreign acquisition,"
Daewoo Motor union official Park Doo-ryong said.

Analysts, though, are wary that some reorganisation will be
needed whoever wins the bid.  "It would be premature to
discuss [GM's] future plans but Daewoo Motor's operations
are not efficient," Merrill Lynch's Ms Han said.

One problem was Daewoo Motor managers not making necessary
changes to the company's operations, leaving them all to
the new owner, she said.  One guide may be Hyundai Motor's
takeover of domestic rival Kia Motors in March last year.

South Korea's biggest carmaker has since cut Kia's staff
numbers by a third from their levels before Korea's
financial crisis battered sales in 1997.  Mr Smith also
promised to beef up Daewoo Motor's research units with GM's
technology to help Daewoo Motor develop new models. GM
would also work with suppliers to improve technology and

"We are comfortable with their capability to produce
platforms for low-cost cars," Mr Smith said.

The GM chairman added that the company would not place any
restrictions on the sale of Daewoo Motor models, although
Asian markets would be the primary target.  GM is eager to
raise its profile in Asia-Pacific, a region which accounts
for only about 4 per cent of its global sales.  The
Detroit-based company hoped to raise that share to 10 per
cent by 2004, or 240,000 vehicles a year, said Rudy
Schlais, the head of GM's Asia-Pacific operations.

The company has bought stakes in the past six months in
Japan's Suzuki Motors and Fuji Heavy Industries, adding to
its 49 per cent holding in Isuzu Motors.

"GM definitely needs Daewoo Motor to build up its presence,
especially in the small-car market," Ms Han said.

The company would also deliver GM a competitive edge with
its plants in Eastern Europe.  GM's chairman said he was
"impressed" by a visit to one of Daewoo Motor's car plants
in Kunsan, south of Seoul, now operating at 96 per cent of
its output capacity.  Daewoo Group's restructuring
committee yesterday set a deadline of June 28 for the bids
to be submitted.

Contenders must include a price offer to help the committee
to narrow the bids to two by the end of next month, with a
winner to be selected by September.  The other bidders are
expected to include Ford, DaimlerChrysler, Fiat and Hyundai
Motor.  Daewoo Motor's sale has been delayed from the
earlier target of August as accountants take longer than
expected to prepare the company's consolidated financial

Still, a quick sale is essential for creditors looking to
minimise their losses and crucial for the carmaker -
battling to keep its customers.  The eventual sale might be
in the form of the buyer acquiring assets without assuming
debt, rather than an equity sale, the company said
yesterday.  GM has said it would offer a stake in Daewoo
Motor to the company's creditors if it won the bid.
Officials also said the US car giant would later seek a
domestic share sale of Daewoo Motor, underlining their
confidence in the car-maker's ability to return to profit.
(South China Morning Post  11-May-2000)

DAEWOO MOTOR: Hyundai Motor tie-up with Ford unlikely
Hyundai Motor's attempt to tie up with Ford Motor to
jointly take over Daewoo Motor has produced little results
so far, the company's top executive indicated yesterday.

Hyundai Motor President and CEO Lee Kye-ahn also said that
the takeover price of Daewoo Motor will likely be settled
at around 3 trillion won ($2.7 billion), far below its
current estimated value of about $6 billion.

"Even 100 percent of Hyundai Motor shares are valued at a
mere 3 trillion won, while the acquisition of a controlling
51 percent stake in Hyundai Motor would cost less than 1.5
trillion won," Lee said in a meeting with reporters. "It is
absurd to speculate that GM, Ford and other Daewoo bidders
will have to cough up as much as $6 billion to buy Daewoo
Motor," he added, suggesting that Hyundai's bidding price
will be in the range of 2 trillion won.

Lee reiterated his strong intent to buy Daewoo Motor,
stressing that monopoly fears over Hyundai's possible
control of Daewoo are unfounded given that Hyundai's global
market share is a mere 0.5 percent.  Regarding Hyundai's
embarrassment over its failed alliance bid with
DaimlerChrysler and Mitsubishi, Lee explained that
Hyundai's hurried announcement last Sunday morning was
closely linked to its bid for Daewoo and inevitable to more
effectively fight back GM and Ford.

Asked about progresses in efforts to form a strategic
alliance with Ford, Lee refused to comment but said that he
was rather worried about the Samsung Group's possible
alliance with Ford in the Daewoo bidding.  In the wake of
Ford Motor Vice Chairman Wayne Booker's recent confirmation
that his company will be ready to tie up with any Korean
partner, rumors have been circulating that Ford and Hyundai
are in alliance talks. (The Korea Herald  11-May-2000)

KIA MOTORS: Fighting W372B tax on write-offs
Following official notification from the National Tax
Service (NTS) that it is levying an additional W372.5
billion corporate income tax on Kia Motors, the car firm is
refusing to pay the tax, saying it is absolutely not
possible for the tax office to impose such a huge amount of

Kia had been on the verge of bankruptcy in 1997 and
following the launch of court supervision in 1998, creditor
banks of the car firm had written off a total of W4.8
trillion in debt. The NTS has therefore been taking steps
to impose taxes on the write-offs, considering the loans as

Current Kia management is claiming, however, that the write
offs should not be subject to corporate income tax, as old
management had rigged the financial statements from 1991 to
1997 and over-reported W4.5 trillion in income during that
period. (Digital Chosun  10-May-2000)

KOREA EXPRESS: Seeks court aid to clear debt to parent
Korea Express Co. said yesterday that it will file suit
with the court to free itself from payment guarantees
extended to its parent company Dong Ah Construction
Industrial Co.

The move by the nation's largest logistics firm followed
the rejection by Dong Ah's creditor banks of its proposal
on settling the payment guarantees.  It offered to sell its
stock to the banks at a sharp discount in return for
writing off the guarantees.

"We will soon ask the court to nullify our obligations to
Dong Ah Construction, which were imposed upon us by the
former owner-chairman of Dong Ah Group," said Kwak Young-
wook, president of Korea Express.

Kwak also asserted that freeing Korea Express from payment
guarantees and letting it grow as an independent company
will benefit the national economy.  He said his company was
bringing the case to court because former Dong Ah Chairman
Choi Won-suk had not taken due in-house procedures in
imposing obligations upon Korea Express. (The Korea Herald

SAMSUNG GROUP: Court suspends father-to-son power transfer
The Samsung Group's much-criticized scheme for a father-to-
son succession of the group chairmanship by means of
transfer of unlisted shares in violation of inheritance tax
laws will likely fail, in the wake of Tuesday's unfavorable
ruling from the court, analysts said.

Samsung Group Chairman Lee Kun-hee has been accused of
evading at least 71.8 billion won ($65.2 million) in
inheritance taxes in the process of handing over 656,215
shares in unlisted Samsung SDS to his only son, Jae-yong,
at unreasonably low prices in February 1999.

In an irregular father-to-son succession scheme typical of
the chaebol, Samsung SDS sold a total of 3.21 million
shares of its bonds with warrant (BWs) to Jae-yong and
three other family members of Chairman Lee at the per-share
price of a mere 7,150 won ($6.5). At the time of the
controversial share transfers, Samsung SDS-issued BWs were
trading at 55,000 won per share in the over-the-counter
market. Its per-share price has since further risen to
470,000 won, helping the Lee family pocket a huge capital
gains worth about 1.5 trillion won.

As a result of the deal, Lee Jae-yong raised his stake in
Samsung SDS to 10.1 percent while paying no inheritance
tax. Samsung Chairman Lee was also criticized for similarly
handing over BWs in other Samsung Group companies, such as
Samsung Everland, Samsung Electronics and Samsung S1, to
his son Jae-yong, gradually paving the ground for an
eventual transfer of group chairmanship.

In a controversial move, the government's tax authorities
and chaebol reformers have turned a blind eye to Samsung's
irregular wealth inheritance and tax evasions, saying that
they failed to find any legal problems with the deals.
But the People's Solidarity for Participatory Democracy
(PSPD) and other anti-chaebol civic groups have
persistently raised legal questions against the Samsung
family. Apart from tax evasion, the Lee family's illicit
wealth inheritance has caused enormous financial damages to
minor shareholders, insisted the activists.

Endorsing the PSPD's charges, a Seoul court ruled against
the Samsung Group chairman in a suit Tuesday. The Seoul
High Court said that the articles of association of Samsung
SDS that lack details on the content of bonds with warrant
(BW) are null and void because they infringe on the
interests of shareholders stipulated in the commercial law.
The ruling came after the PSPD submitted an application for
a provisional disposition not to allow six Samsung
officials, including Lee Jae-yong to dispose of Samsung SDS

With the ruling, Samsung SDS cannot issue new shares for
the BWs, which the officials purchased at a low price as
part of the group's alleged efforts to have Lee's son
inherit a huge fortune by exploiting the law.

Meanwhile, the Samsung SDS scandal is not the first time
Lee Jae-yong has been involved in allegedly irregular
transactions of Samsung stocks and bonds.

In November of 1998, he pocketed a capital gain of 13.3
billion won by selling his shareholding in Cheil
Communications Inc., the group's advertising arm, and
Cheil's convertible bonds. In October 1994, Lee purchased
120,000 shares of S1 Corp., the group's unlisted security
service provider, for 19,000 won per share. He sold his
shareholdings after SI went public in February 1997, making
a capital gain of 25.6 billion won. (The Korea Herald  11-


LINGKARAN TENGAH: UEM says road unit in default of loans
Construction company United Engineers (Malaysia) (UEM) said
its wholly-owned road unit Expressway Lingkaran Tengah Sdn
Bhd (Elite) is still in default of payment on 940 million
ringgit (U.S. $247.4 million) of loans.

UEM said Elite has received agreement in principle from
creditors not to take further action pending its debt-
restructuring scheme, which is being finalized.  In a
statement to the Kuala Lumpur Stock Exchange, UEM said, as
of Mar 31, 2000, Elite has fully used a 400 million ringgit
bond issues facility, a 440 million ringgit note issue
facility and a 100 million ringgit bridging loan facility.

The bond and note issue facilities are backed by a charge
on Elite's assets, and the assignment of all contracts for
its construction works.  UEM is an associate of Malaysia's
largest conglomerate, the politically well-connected Renong
Bhd. (The Edge  10-May-2000)

PAN PACIFIC ASIA: OSK threatens action for aborted sale
OSK Holdings Bhd created a stir in the market by announcing
that it would hold Pan Pacific Asia Bhd (PPAB) liable for
any failure to honour the deal to sell the latter's
Peninsula Securities Sdn Bhd to OSK.

Announcing this to the Kuala Lumpur Stock Exchange
yesterday, OSK deemed PPAB's act of voiding the agreement
to be a unilateral one and in response declared its
intention to take action against PPAB for full performance
of the agreement.

On May 8, PPAB claimed that the share sale agreement
entered into with OSK had been frustrated by the Policy
Framework for Stockbroking Industry Consolidation and
Reduction of Transaction Costs (Policy Framework) issued by
the Securities Commission last month.

PPAB, through its solicitors, gave formal notice of its
intention to void the agreement and refunded OSK the
initial deposit of RM10 million, with accrued interest.

Analysts voice their surprise at the turn of events. TA
Securities analyst Alex Goh says, "PPAB's other core unit,
Jafuong Plywood Corporation, is under receivership for a
default of RM47 million in bank loans. We would have
thought the deal would be to PPAB's advantage since it
would enable the company to get out of its debt woes."

Goh does not think Peninsula Securities stands much chance
of becoming a universal broker and, as such, it will have
to merge with another larger stockbroking entity. This
makes PPAB's decision all the more perplexing. Analysts
speculate that the price tag could be among the main
reasons for PPAB's trying to void the deal. Other
possibilities include a new and better suitor, or even an
alternative way out of its debt problems.  Officials of
PPAB could not be reached for comment.

PPAB and OSK had in January entered into a share sale
agreement in which PPAB would sell the entire paid-up
capital of 100 million shares in Peninsula Securities to
OSK for RM225 million or RM2.25 per share. This is to be
settled by cash and OSK shares. OSK Securities Bhd would
undertake to place out the new OSK shares.

The deal was said to have valued the net tangible assets of
Peninsula Securities at 1.8 times over its book value,
which is higher than the 1.5 times cap imposed by the
Securities Commission.  (The Edge  10-May-2000)

TIME ENGINEERING BHD: Creditors' adviser favors SingTel
The adviser to Time Engineering's creditors is supporting
the company's plan to repay more than 5 billion ringgit
(HK$10.25 billion) in debt, including the sale of a stake
to Singapore Telecommunications.

That may encourage creditors to rule on June 8 in favor of
Time's plan, rejecting a rival proposal from the Sapura
group, one of Time's biggest creditors. Sapura has put
forward a plan that gives it control of Time dotCom, Time's
telecommunications unit and its most prized asset.

Although short of recommending that creditors vote in
favour of Time's plan, NM Rothschild & Sons (Singapore),
which is advising the creditors of the manager of
Malaysia's biggest fiber optic network, said in notes
obtained by Bloomberg News that SingTel is likely to pay
more than any other bidder for stakes in Time and two of
its units, as "other strategic investors are unlikely to be
able to develop synergistic benefits and economies of scale
to the extent SingTel can and therefore will probably pay
less for an investment."

At stake is Time dotCom's 3,600 kilometre fiber-optics
network across peninsular Malaysia that links Singapore
with Thailand and is critical to any company looking to
provide pan-Asia telecommunications services.  Time dotCom
has interests in mobile and fixed-line telecommunications,
the Internet and the fiber-optics network. Analysts see it
as Time Engineering's growth engine.

Some of Time's biggest creditors include Malaysia's biggest
pension fund Employees Provident Fund, which is owed 590
million ringgit, Malayan Banking, with 131 million ringgit,
Nokia Oyj, the world's biggest cellular phone maker with
77.7 million ringgit. Sapura group is owed about 400
million ringgit while Telekom Malaysia is owed 86 million
ringgit. Other creditors include RHB Bank, Bank of
Commerce, Standard Chartered Bank, and Goldman Sachs.

Sapura is offering to pump in 1.8 billion ringgit for 40
per cent of Time dotCom, converting its debt into stock.
The bid values Time dotcom at 5.7 billion ringgit, lower
than the 8.3 billion ringgit estimated by Rothschild. On
May 8, Time rejected Sapura's bid because it said it didn't
want to lose control of Time dotCom.

SingTel is looking to buy a 14.5 per cent stake in Time for
649.3 million ringgit. It wants to buy 20 per cent of Time
dotCom at 3.30 ringgit a share, or 1.67 billion ringgit. It
also wants to buy 20 per cent of Time Online at a price
being negotiated. (Hong Kong Standard  11-May-2000)


ASB HOLDINGS: SEC probing 'loans', urges DOF tax probe
The Securities and Exchange Commission has started looking
into the books of property developer Luke Roxas' ASB
Holdings Inc. to determine how the company amassed P3.9
billion in obligations to private individual lenders and
whether it violated any of the country's rules and laws in
the process.

SEC Chair Lilia Bautista said that ASB and its officials
may have violated the rules on commercial paper issuances
when it failed to register its P3.9 billion in loans from
more than 700 individual lenders.

Sources said that ASB Holdings, through so-called in-house
"traders," enticed individuals to lend their money to ASB
Holdings through short-term placements that earned higher
interest rates compared to that offered by banks. Investors
did not receive any "confirmation advice" or acknowledgment
of their investment except for post-dated checks.  Roxas
reportedly used the proceeds of the placements of the
lenders to invest in ASB's real estate and other projects.

"What is surfacing is investors are attracted (to firms
such as ASB Holdings) because I don't think taxes are being
withheld," Bautista noted. She pointed out that the
Department of Finance should take a look at the interest
earnings of the lenders.

Bautista said the SEC would have to see whether the post-
dated checks issued by ASB Holdings could be considered
under the law as commercial papers, which would have had to
be registered with the SEC.  An SEC official said that by
borrowing from hundreds of individuals, ASB may have
violated the 19-lender rule wherein no company can borrow
from more than 19 individuals unless it has a quasi-banking
license, which the firm did not have.

Last week, the SEC granted the petition of the ASB Group of
Companies and allied firms for a 60-day debt reprieve.
The companies had filed a petition for rehabilitation and
suspension of payments with the SEC to stop creditors from
moving to recover the companies' P12.7 billion in debts
following the collapse of talks with creditors.

Aside from obligations to private individual lenders, the
group also owes more than P5 billion to various creditor
banks, among them China Banking Corp., Allied Banking Corp.
and Metropolitan Bank and Trust Co.  In the order, the SEC
also granted the Roxas group's request to appoint former
SEC commissioner Monico Jacob as interim receiver of the
ASB group.

The ASB group, the owner and developer of numerous
residential and office condominiums and other real estate
projects, ran into trouble late last March when individual
creditors withdrew or terminated massive loans to ASB
Holdings. (Philippine Star  10-May-2000)

LINTEX INT'L: Shuts operations in Philippine zone
MAXRICH INC.: Shuts operations in Philippine zone
SUNBURST GARMENTS CO.: Shuts operations in Philippine zone
Three Taiwanese firms, Sunburst Garments Co, Maxrich Inc
and Lintex International, based at the Clark Special
Economic Zone, with 850 workers, have served notice that
they will cease operations on June 5.

The workers were due to demand a collective bargaining
agreement on May 6 when the closure notices were posted,
said Noel Ramos, vice president of Sunburst Labour Union.
Most of the regular workers have been paid 50 pesos
(US$1.20) to 60 pesos each per day for working for as long
as 12 hours. The firms' executives said their move was
prompted by a fall in orders from abroad. (Asia Pulse  10-

PB COM: Pays P2B in emergency loans
After containing a run on its deposits last week and the
infusion of additional capital, Philippine Bank of
Communications (PB Com) is now paying back over P2 billion
in emergency loans it acquired from the Bangko Sentral ng
Pilipinas (BSP), a high-ranking PB Com official told The
STAR yesterday.

The official, who requested anonymity, said PB Com is also
ruling out emerging with other banks just to strengthen its
position in the industry.

"With a new capital, we intend to stay as a strong
commercial bank on our own," he said, adding that "we also
want to stay as a commercial bank even if our capital is
way above that of a universal (extended commercial) bank."

On May 3, the board of directors of PB Com approved an
increase in its capital by P2.6 billion to P7.3 billion
from P4.7 billion. This exceeded the minimum capital
requirement for commercial banks of P2.4 billion and P4.950
billion for universal banks.  He said PB Com has paid the
BSP over P1 billion last week out of the P2.5 in emergency
loans it obtained. It is expected to make more payments
this week.

The bank tapped the lending facility of the BSP to finance
heavy withdrawals on April 28 as nervous depositors pulled
out their funds after receiving text messages that the bank
along with the International Exchange Bank (iBank) are
suffering from a bank run.

Earlier, PB Com has been reported to be eyeing other banks
including Rizal Commercial Banking Corp. for a possible
merger. The official, however, said its shareholders,
decided to improve the bank's finances through infusion of
new capital.

"Basically, this is just a show of faith by shareholders.
They want to give the message that they are behind the bank
one hundred percent," he said. The bank's principal owners,
he said are among the country's original Chinese taipans
namely the Luys of International Copra Export and the
Nublas and Chungs of La Suerte Cigarette. (Philippine Star

URBANCORP INVESTMENT INC.: SEC orders under receivership
After being shielded from creditors for 60 days, Urbancorp
Investments, Inc., the investment house subsidiary of
beleaguered Urban Bank, was placed under receivership to
preserve all its assets in preparation for its financial

The Securities and Exchange Commission (SEC) yesterday
appointed Corazon S. dela Paz, chairman and senior partner
of auditing firm Joaquin Cunanan & Co./Price Waterhouse-
Philippines, as interim receiver of the ailing investment

Under corporate recovery rules, Ms. dela Paz will be
responsible for collecting and preserving the estimated
more than 6.33 billion Philippine pesos ($0.153 billion at
PhP41.353=$1) in assets of Urbancorp.

Management of the business remains with the incumbent board
of directors.  However, no transactions in behalf of the
company may be done without the approval of the SEC.
Meanwhile, officials of Urban Bank's subsidiaries who
allegedly entered into fraudulent transactions which led to
the bank's closure last month will be investigated, the
Department of Justice (DoJ) said.

In a press conference, Justice Secretary Artemio G. Tuquero
said he ordered the team of investigators handling the
Urban Bank case to closely look into the "unsound and
unsafe banking practices" of its other businesses.

These questionable deals, Mr. Tuquero said, "may warrant
the prosecution for fraud" of officials of Urbancorp;
Urbancorp Life Insurance, Inc.; Urbancorp Realty
Developers, Inc.; and Urbancorp Securities, Inc., among
other companies.

"Our investigators should be looking into some previous
transactions of Urban Bank and its subsidiaries...even
pending the submission of the formal complaint of the joint
team composed of the Bangko Sentral (Central Bank), the
Philippine Deposit Insurance Corporation (PDIC), and the
Securities and Exchange Commission," he said.

For one, the Bangko Sentral is looking at the possibility
Urbancorp engaged in "Wincorp-like" transactions, referring
to cash-strapped investment house Westmont Investment
Corp., which brokered securities deals but was caught by
liquidity problems when investors suddenly pre-terminated
their holdings.

"In this case, Urban Bank may actually be sound but was
only infected by the liquidity problems of Urbancorp when
clients pre-terminated their investments," a senior Bangko
Sentral official earlier said.

Perhaps in a bid to contain the contagion, sources said
Urban Bank decided last February to cut its equity exposure
to the investment house to 40% from 80%.  That month, the
bank disclosed to the Philippine Stock Exchange that four
of its senior officers -- reportedly all involved in
Urbancorp deals -- had resigned.  Money market sources
described Urbancorp's market dealings and practices as

One trader said, as a "player" on both the formal and
informal secondary securities market, Urbancorp actually
had "more clout" than its parent Urban Bank.  "Their
transactions are as big, if not bigger, than (that of)
Urban Bank," he said.

As the DoJ conducts an independent examination to trace the
roots of Urban Bank woes, the SEC enjoined Urbancorp from
disposing of its properties, except in the ordinary course
of its business and from making any payments of its
liabilities outstanding as of May 8.  Urbancorp sought a
debt payment suspension last Monday after it failed to
service maturing obligations amounting to more than PhP5.83
billion ($0.141 billion).

The debt moratorium was premised on the fact that a
rehabilitation plan was designed to ensure the servicing
and eventual repayment of all its debts.  The proposed
financial recovery plan focuses on:  collection of
receivables, restructuring of Urbancorp's various
obligations with the consent of its creditors and
investors, and streamlining of its operations for the
effective management of its revenues and funds, all with
the end in view of strengthening its financial and business

Urbancorp operated as an investment house without quasi-
banking functions and engaged in trust operations pursuant
to its trust license issued by the Bangko Sentral. It
blamed its liquidity problems on several factors, including
a Bangko Sentral circular covering the conversion of Urban
Bank into a thrift bank which "resulted in the loss of
(public) confidence in its stability and financial

The investment house also blamed the recent scandals
involving Westmont Investment Corp. and ASB Holdings, Inc.
Last May 1, President Estrada directed the DoJ to form a
task force to investigate allegations of mismanagement of
Urban Bank. The Chief Executive wants the probe to end in
two weeks.  The DoJ chief said investigators are
particularly interested in the loans Urban Bank assumed
from its investment arm.

"These 'purchased' loans were generally considered
substandard and, therefore, are considered unsound and
unsafe for a bank, which is entrusted by depositors to
safeguard and manage their deposits prudently," said Mr.

The DoJ has yet to uncover controversial contracts other
Urban Bank subsidiaries may have finalized that ultimately
affected its cash position.  These questionable agreements,
Mr. Tuquero said, can be traced once supporting documents
and testimonies are secured from board of directors of the

Urbancorp Insurance Brokers, Inc. is a licensed insurance
broker by the Philippine Insurance Commission. Urbancorp
Securities, Inc. was formed to expand Urban's presence in
the capital market while non-financial subsidiary Urbancorp
Realty Developers was incorporated to take advantage of the
real estate boom in the 1990s.

Following Malaca¤ang's order, the DoJ activated a 10-man
task force on financial fraud headed by assistant chief
state prosecutor Leonardo Guiyab, Jr. to handle the Urban
Bank investigation.  Mr. Tuquero said the DoJ is still
waiting for the central bank to submit a formal complaint,
a requirement before it can start the formal preliminary
investigation on Urban Bank's shutdown.

The formal investigation will determine whether criminal or
administrative charges can be filed in proper courts
against bank officials.  (Business World  11-May-2000)


BURAPA STEEL: Bankruptcy Court accepts rehab petition
ISA CO.: Bankruptcy Court accepts rehab petition
NARONG CANNING CO.: Bankruptcy Court accepts rehab petition
The Central Bankruptcy Court yesterday accepted debt-
restructuring petitions filed by Burapa Steel Co, ISA Co
and Narong Canning Co and their creditors.

The petition for Burapa Steel was filed by its lead
creditor, Standard Chartered Nakornthon Bank. The maker of
steel rods owed 1.53 billion baht to 90 creditors as of Dec
31. Santisuk Pluksawas, an executive of the company, was
proposed as the planner.

ISA, a tuna cannery, owes one billion baht to 173
creditors. The petition filed by Bank of Asia proposed
Vanida Pibultonpatana, managing director of the company, as
the planner.

Narong Canning, another tuna cannery, owes two billion baht
to 210 creditors. Bank of Asia filed the petition and
proposed Vanida Pibultonpatana, managing director of the
company, as the planner.  The court scheduled the first
hearing for the three cases on June 5. (Bangkok Post  11-

RAIMON LAND: Debt plan `sound'
A plan to restructure Raimon Land's Bt6.3 billion debt is
likely to be approved at the end of the month.

The company reported to the stock exchange yesterday its
steering committee had approved the draft term sheet. It
will vote on the move at the end of the month.  Under the
plan, Raimon Land will transfer its property to the secured
creditors, reducing the secured debt by an amount equal to
the current open market value. After the company will
convert some remaining debt to equity. On completion of the
plan, creditors will provide Raimon Land with funding to
develop new projects.

A source close to the deal said Raimon Land was also
considering selling shares to a subsidiary of an
international real estate group, and the two parties were
now negotiating.  Raimon Land began the restructuring
process in February. The company's steering committee has
been working with PricewaterhouseCoopers FAS Ltd to draft
the term sheet.

If the steering committee approves the term sheet, the
company's debenture holders will vote on adjusting the
terms and conditions of the debentures. The debenture
holders also will select a representative to sit on the
Corporate Debt Restructuring Committee.

Committee members will hold about 90 per cent of Raimon
Land's total debt. The majority is held by the Asset
Management Corporation, which has already agreed to the
proposed restructuring plan. (The Nation  11-May-2000)

SAHAVIRIYA OA PLC: Reports progress on reorganization plan
SVOA Planner Co., Ltd. (SVOA Planner), through Antony
J.Norman and Dr. Thienchai Srivichit, Directors, as planner
of Sahaviriya OA prepared this report to update the Stock
Exchange of Thailand for the progress of activities
undertaken by SVOA Planner and SVOA management, covering
issues such as on-going management, status of the
implementation and financing arrangements.

From a management perspective, SVOA performance reflects
the rebuilding process the business is going through as it
is just coming out from the plan preparation period. SVOA
is attempting to regain its market position from a low base
in 1999.

As part of the implementation, several major agreements
such as Inter-Creditor Agreement, Assets Transfer and Debt
Resumption Agreement, Real Estate Transfer and Debt
Resumption Agreement, and Lease Agreement are being
reviewed.  In addition, the information memorandum for a
financing arrangement was prepared for a facility
consisting of letter of guarantee, letter of credit and
working capital to enable us to approach to several
potential lenders.

The focus for the management of SVOA has been to pursue
market opportunities, establish business development plans,
and maintain the relationship with the suppliers.  As
expected the sales and profit performance of the business
for the first quarter is low and one of the main reasons is
because of the company's liquidity problem. At present,
SVOA does not receive any financing arrangements for
working capital, letters of guarantee and letters of
credit. Thus, its payments to suppliers have to be either
by cash basis or unfavorable terms.

The focus of the management of the ITDSBU was the
management of cash flow in their business. At present,
SVOAs credit terms offered to their customers are better
than credit terms offered by several key suppliers.
Therefore the cash flow is very tight. The situation is
expected to improve once SVOA has re-established its market

Due to the cash flow constraints, the management of
inventory is a critical focus. The process for managing
inventory is to base a purchasing requisition on a clear
evaluation of the inventory on hand, the expected customer
demand and the expected turnover of the inventory. Because
of the current cash flow squeeze, most inventory purchasing
has been only for firm customer orders.

Policies for debtor management are being implemented to
that debts are collected promptly and customers who do not
pay are stopped from purchasing. Reporting of aging debtors
on a monthly basis will identify problem debtors and
accountability for debt collection will be identified.

An ongoing requirement in the ITDSBU is to develop the
abilities of the people in this operation to plan and
manage their supply chain operations effectively. To this
end we are training and developing accountabilities for
people in this business for inventory control and
forecasting accuracy.

The key operational issue in SISBU continues to be the
recruitment of key staff to increase the capacity for
taking on work. By the end of February 10 key management
appointments had been made.  Moreover, management is
developing a project-costing model that will allow the true
cost of projects to be calculated and monitored. The
profitability of projects will be key performance measures
for the business.

The control of project costs and management of project
profitability in this business is essential. A similar
approach to the control of project costs and profitability
will be taken in this business.  The key operational
objective for the IT Project business is to complete
projects to schedule to ensure cash flow is maintained.
The IT Project also requires a finance credit line to allow
it to offer finance terms to its project customers.

The Share Transfer and Claim Reduction Agreement was signed
by SVOA and Acer Sales and Distribution on 1 March 2000.
Transfer of selected assets and liabilities to Special
Purpose Vehicles -- Both SPVs were set up and the structure
of shareholding of these SPVs will be discussed further
between SVOA Planner, Legal Advisor and the Creditors
Committee. Relevant documents for the implementation
process including Assets Transfer and Debt Assumption
Agreements, Inter-Creditor Agreement and other related
document are being reviewed.

The draft lease agreement between SVOA and the real estate
SPV is being reviewed. The required space has been
determined by SVOA while an appropriate rate for SVOA is
being evaluated by Real Estate Agents and SVOA Planner.
SVOA Planner is still in the process of contacting several
international real estate firms to act as marketing and
management property professionals for the building and also
as agents for potential buyers.

SVOA has already reduced its paid-up capital from THB 300
million to THB 200 million.  SVOA is undergoing the process
of issuing 180 million new shares at 10 Baht of par value.
This will increase SVOAs registered share capital to THB
2,000 million. Once the Inter-Creditor Agreement is signed
by the creditors, the selected assets with the same amount
of liabilities will be transferred to the SPVs and part of
the debt will be swapped for SVOAs shares with the
remaining debt at SVOA forgiven. In order to pay dividends
in the near future and to strengthen SVOAs balance sheet,
SVOA will reduce the capital for the second time by 75% of
capital from the 2,000 million to THB 500 million.  Once
SVOA can meet trading resumption criteria imposed by the
Stock Exchange of Thailand, SVOA will apply immediately.

An asset transfer and debt novation agreement is due in
May-June, including Investment, Account Receivables, Amount
due from related parties and loans to related parties.
Appointment of Collection Company and Transfer of Title
Land and Building also in May-June, as is the Appointment
of Management Company.

A change in the registered capital and details of the
capital reduction at Ministry of Commerce was registered
April 11.  The new capital and a list of shareholders will
be registered at the Ministry of Commerce May-June.
Notification of all creditors in writing off capital
increase and completion of debt/equity swap under the plan
will occur in May-June.
Letters to creditors advising certain percentages of their
credit is to be eliminated once the plan terms are to be
fulfilled May-June, while the registering of a change in
the registered capital and details of the capital reduction
at Ministry of Commerce is set in May-June.

The Bankruptcy Court is to be notified of the completion of
the Plan.  (Stock Exchange of Thailand  10-May-2000)

THAI TEL.& TEL.: Court accepts rehab petition
Reference is made to Thai Telephone & Telecommunication
Public Company Limited's filing of a rehabilitation
petition with the Central Bankruptcy Court as well as the
trial date of May 8, 2000. The Company, through Witit
Sujjapong, Executive Vice President, Finance & Accounting
Department, reports that the Court has ordered the
Company's rehabilitation as there was no objection from any

However, as to a rehabilitation planner, although it had
been agreed among the Company and its majority creditors
that the Company should be appointed as the planner, since
the Telephone Organization of Thailand as one of the
Company's creditors filed an objection, the Court ordered
that the meeting of the creditors shall be held on May 29,
2000 in order to select the rehabilitation planner.
Meanwhile, the Court has appointed the Company as temporary
administrator for continuous business operation.  (Stock
Exchange of Thailand  09-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

Troubled Company Reporter -- Asia Pacific is a daily
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Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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