TCRAP_Public/000914.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

        Thursday, September 14, 2000, Vol. 3, No. 179

                                     Headlines


* A U S T R A L I A *

FARMINDEX.COM.AU: Buyer sought for debt-ridden portal
ONE.TEL: Share price falls again, investors uneasy
SIGMA CO.: Bleeds red ink for first half of year
VILLAGE ROADSHOW: Posts 1H loss


* C H I N A  &  H O N G  K O N G *

PACIFIC CENTURY CYBERWORKS: Stock tumbling downward


* I N D O N E S I A *

PT DAVOMAS ABADI: Court grants debt payment suspension
PT INDOMOBIL SUKSES INT'L: Posts Rp139.4B 1H loss
PT TIRTAMAS COMEXINDO: Debt-payment moratorium extended


* J A P A N *

CHIYODA LIFE: Looking to ally with foreign insurer
MITSUBISHI ELECTRIC: Latest scandal for business group
SOGO CO.: Probing allegations of executive illegalities
WestLB SECURITIES PACIFIC: SESC recommends penalties


* M A L A Y S I A *

TIME ENGINEERING: Preparing IPO for debt paydown


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

FORTUNE TOBACCO CO.: Appeal urged of tax case dismissal
JADE BANK: Owner charged with fraud
VICTORIAS MILLING CO.: Urging debt-to-equity swap


* T H A I L A N D *

AROMATICS THAILAND: In rehab talks with creditors
THAI PARAXYLENE: Gets recapitalization, debt extension


=================
A U S T R A L I A
=================

FARMINDEX.COM.AU: Buyer sought for debt-ridden portal
-----------------------------------------------------
Farmindex.com.au -- an ambitious initiative to create a
farming industry Internet portal -- has collapsed under
$50,000 of debt, a voluntary administrator being appointed
to find a buyer or investor.

A privately owned online service based in Gunnedah, NSW,
Farmindex.com.au had been marketing itself as "the premier
rural Web site offering services to the rural community."
The advertising-supported Web site purported to be a
"gateway information site for rural Australians" with a
"comprehensive news section, markets, weather, industry and
community information."

But many of the sections, including "stockmarkets" and
"Internet banking" were blank yesterday and others appear
not to have been updated for months. A retail e-commerce
section promising sales of everything from real estate to
fertiliser was never launched.

Farmindex owed creditors about $50,000 and was now looking
for a buyer so it could continue operating, according to
administrator Alan Topp, of accountancy firm Armstrong Wily
& Co.

"They've just run out of money," Mr Topp said yesterday.
"The product needs someone to come along who can provide
the in-house expertise or the cash to make sure it works
properly."

Armstrong Wily also handled the recent liquidation of PC
manufacturing empire Edge, which was owned by entrepreneur
Mr Johnson Wang, who also founded failed Internet service
eisa.

"Essentially, there aren't a high number of creditors," Mr
Topp said. "The [Farmindex] shareholders are looking for
some equity participants or someone to buy the business.
There was a small number of external creditors with claims
totalling about $50,000 but shareholders had invested about
$1 million in the site, he said. "There are some claims yet
to be made by certain shareholders."

Armstrong Wily would continue to operate the business until
an investor or buyer was found, Mr Topp said. Farmindex
content manager Ms Judy O'Connor declined to comment
yesterday. (Sydney Morning Herald  13-Sept-2000)

ONE.TEL: Share price falls again, investors uneasy
--------------------------------------------------
One.Tel's share price was slammed yesterday, falling 10.5
per cent to 85c, wiping $250 million off the telco's market
capitalisation and bringing it perilously close to the 81c
level at which major shareholders News Corp and Publishing
and Broadcasting bought in early last year.

The sell-off was sparked by investor impatience over the
continued heavy flow of red ink following the $291 million
loss for the year to June.  The negative sentiment was
compounded by joint managing directors Mr Bradley Keeling
and Mr Jodee Rich receiving $7.5 million in salary and
bonuses.

"These bonuses leave a bit of a bitter taste in people's
mouths when they look at the losses," said Burdett

Buckeridge Young telecom analyst Mr Mark McDonnell.
There was some offshore selling in the stock, while JB Were
& Son and Hartley Poynton were the biggest sellers on the
day, which saw 9.8 million shares traded. "One bad number
and everyone starts running", was how one broker
characterised the trade in One.Tel.

After plunging 20c in the past two days in the wake of its
annual results, One.Tel is now just 4c shy of the 81c a
share paid by PBL and News Corp when they made their
initial investment in the company in February last year.
The media giants each bought 120 million shares, or a 20
per cent stake.

In addition to their base pay of $560,000 each, both Mr
Keeling and Mr Rich received $6.9 million in bonuses in the
last financial year, which were linked to performance
objectives set in 1998, including increases in the
company's market capitalisation.

"It's related to overall movements in the share price in
the intervening period and One.Tel is a growth stock," said
one analyst. Issued at the equivalent of 20c a share in
1997, One.Tel hit $2.48 last December. "The asset value has
gone up immeasurably over a short period of time," said one
broker.

Mr Keeling last night defended the payout he and Mr Rich
received. "The board set certain performance objectives to
be specifically satisfied over a period of years, not just
in the year we made a loss," he said.  "We've taken One.Tel
from a start-up to an IPO to a multinational telephony
company operating in eight countries and as a result of
satisfying certain performance objectives we were
rewarded."

Analysts said although concerns over the level of executive
remuneration would affect sentiment in the short term, the
more crucial issue was whether One.Tel could make good on
its forecast of 3 million customers generating $1.1 billion
revenue by the end of this financial year.

"The company has had over 100 per cent sales growth in 12
months, yet their earnings position has deteriorated
considerably," said Mr McDonnell. (Sydney Morning Herald
13-Sept-2000)

SIGMA CO.: Bleeds red ink for first half of year
------------------------------------------------
Pharmacies and pharmaceuticals group Sigma Company has
finished the first half of the year in worse shape than
forecast two weeks ago, dipping $2.2 million into the red.

Sigma, which owns the Guardian and Amcal pharmacy brands,
warned of the profit fall at the end of August but said
then it expected a small profit. Instead, the abnormal
charges of $10.8 million racked up from merging its
wholesale and retail health-care divisions neutralised the
$10.8 million of profit before abnormals and tax.

With tax of $2.3 million still payable after credits,
Sigma's first half to July 31 ended in a loss compared with
a $3.6 million profit for the corresponding period of 1999.
Sigma also lost its managing director, George Savvides,
last month, although chairman Julian Stocker said the new
team under Elmo de Alwis was "actively progressing the
company's strategic agenda."

Dr Stocker said in a statement that the standout
performance from Sigma's divisions was its pharmaceutical
operation, which almost doubled its contribution following
recent purchases.

"The integration of our two recent manufacturing
acquisitions is progressing well and has contributed to the
strong growth in pharmaceutical division
earnings," he said. "The health-care division continued to
focus on several profit enhancement opportunities,
achieving earnings growth ahead of sales growth and
improved return on funds employed."

Pharmaceutical sales rose from $44.5 million to $100.8
million in the half, and earnings before interest and tax
jumped from $4.8 million to $9.2 million.  In spite of the
loss, Sigma maintained an interim dividend at five cents a
share, fully franked, and payable on November 27. Its
shares yesterday rose six cents to $1.39. (The Age  13-
Sept-2000)

VILLAGE ROADSHOW: Posts 1H loss
-------------------------------
Village Roadshow's foundation cinema screen business lost
almost $4 million before tax in the six months to June,
dragging at the group's year to June earnings.

Shareholders are to pay the price for the flagging
performance of the cinemas on which the controlling Kirby
family built the Village name, with dividend slashed by
almost a third.  The bright light for Village was its
Austereo radio division, owner of the MMM and FOX stations,
which has accelerated away from the exhibitions business to
contribute 76 per cent of group earnings in the latest
year.

The radio division lifted its pre-tax contribution from
$26.9 million to $36.2 million for the year, on a buoyant
jump in revenue of almost $20 million to $122.3 million.
Radio, which is helped along by direct marketing, through
the 50 per cent-owned Simon Richards Group and outdoor
advertising, with NLD Village Mall Media, has also pushed
hard into the online arena to widen its audience and
advertising reach.

Village yesterday posted a marginal $1.1 million profit
rise, after tax but before abnormals, to $76.5 million on
an 8 per cent revenue increase to $865.6 million.  The
company's increased profit was helped along by its decision
to bring to account $5 million from successful movie
productions, principally The Matrix, which bolstered the
result of its production division.

The production arm had managed a pre-tax profit of only
$2.2 million in the first half but finished with $16.4
million, still down on 1999's $18.5 million.  The
exhibition arm, which Village warned in May was suffering
and then later announced it was restructuring, slumped from
$14.7 million to a $1.3 million pre-tax profit. In 1998 it
earned almost $30 million.

Village managing director Mr Graham Burke said the outcome
reflected a worldwide slump as recent movies failed to
engage its core customer group, which has a high overlap
with those using the Internet.

"We have faced up to the reality of a worldwide problem in
cinema exhibition and are determined to improve the return
on funds employed," he said.  "We are taking decisive
action in restructuring the division including the
reassessment of all current and future sites and the
consideration of various options in underperforming
territories."

Those comments suggest Village may do in other countries
what it did in Hong Kong last month -- quitting its joint
venture investment with Golden Harvest for $13 million.
While Village's abnormal items netted out at only $5.7
million, before tax, they included a $20.5 million profit
from asset sales and a $17 million foreign exchange gain
against which it wrote-off $24.4 million in goodwill and
fixed assets, $5 million on legal and employee settlements
and another $14 million in development costs and projects.
The charges for development costs and projects appear to be
becoming a regular item, with Village having charged $17.7
million as an abnormal last year.

Final dividend on ordinary shares is down from 10c a share
to 7.175c, with no franking credits, and preference
shareholders have also taken a haircut from 13c to 10c a
share. (Sydney Morning Herald 13-Sept-2000)


==============================
C H I N A  &  H O N G  K O N G
==============================

PACIFIC CENTURY CYBERWORKS: Stock tumbling downward
---------------------------------------------------
Richard Li's Pacific Century CyberWorks, which swallowed
Cable & Wireless HKT last month, has become a deadweight on
the Hongkong bourse, taking the benchmark index down below
a major support level yesterday.

Leading the losers in a pre-holiday session, CyberWorks --
Asia's largest Internet investment company by market value
-- tumbled a further 3.6 per cent to the year's lowest
level of HK$12.20.  This brings its losses since last week
to almost 16 per cent. The stock is down 45 per cent in six
months, making it the second worst performer among the Hang
Seng component stocks.

Other telecom giants Hutchison Whampoa and China Mobile
also suffered heavy losses yesterday as investors fled blue
chips on concerns over rising oil prices, the overheating
tech sector and impending fund raisings by telecom
companies ahead of the bidding of global third-generation
mobile phone licences.

The heavy sell-off sent the Hang Seng Index below the
support level of 17,000 to 16,629.78, down 2.22 per cent or
378.20 points.  Brokers yesterday said investment funds are
pulling out of CyberWorks on widespread concerns over a
number of factors. Besides talk in the market about
possible sale of CyberWorks' shares by Cable & Wireless
plc, the stock had also been hit by a spate of bad news
linked to the cancellation of several strategic
partnerships.

These included the abandoning of a venture fund plan with
strategic partner Nasdaq-listed CMGI Inc and the decision
by Taiwan's GigaMedia not to join CyberWorks in investing
in content provider ERA Communications Co.  Brokers and
fund managers were reported to have sold down the counter
after the two failed ventures as they worried about whether
CyberWorks would be able to deliver its business plans.

Analysts said the failure of the GigaMedia deal could
hamper CyberWorks' ability to produce Chinese language
content and hinder its expansion into mainland China.
It was also rumoured that several strategic investors of
CyberWorks sold options on the counter in the last few
sessions with derivative related trading magnifying
CyberWorks's fall. Among those said to be selling were CMGI
which owns 3.1 per cent and Japan's Hikari Tsushin who
controls 3.5 per cent.

In the meantime, the Hongkong Economic Times yesterday
quoted an unnamed "management" person at CyberWorks warning
small investors to be cautious ahead of the release of its
interim results later this month, since they expect a
combination of thin turnover and speculative trading to
make its share price volatile.  Indeed, analysts expect the
stock to remain weak in the weeks ahead and see it falling
to between HK$8 and HK$10.  (Business Times  13-Sept-2000)


=================
I N D O N E S I A
=================

PT DAVOMAS ABADI: Court grants debt payment suspension
------------------------------------------------------
The Jakarta Commercial Court has granted PT Davomas Abadi a
six-month debt payment suspension after a majority of the
company's creditors approved in principle the initial terms
and conditions of its debt restructuring plan.

Judge Kristi Purnamiwulan said the court will issue an
official document on Sept. 18 that grants Davomas the six-
month payment suspension. The suspension should allow the
company more time to negotiate with creditors on the final
debt restructuring agreement, she said.

Davomas creditors' meeting last week resulted in 64
creditors agreeing with the debt restructuring proposal,
three opposing and one abstaining.

PT INDOMOBIL SUKSES INT'L: Posts Rp139.4B 1H loss
-------------------------------------------------
The performance of automotive company Indomobil Sukses
International (IMAS) and its subsidiaries was far from
impressive during the first half of this year, the company
recording a consolidated net loss of Rp139.37 billion.

That marked a drastic turnover from the same period a year
earlier when the company posted a Rp131.06 billion net
profit.  The company attributed to the losing semester
mainly to non-operating expenses, which totaled Rp259.99
billion during the January-June period this year.

Indomobil enjoyed a non-operating income of Rp196.88bn
during the same period last year.  Such high non-operating
expenses were partly resultant from Rp232.04 billion in
foreign exchange (forex) losses. During the same period
last year, the company posted forex gains of Rp213.33
billion.

Interest expenses amounted to Rp59.19 billion for the
period January-June this year, down from Rp82.74bn for the
the same period last year.  Cost of goods sold rose 237.67
percent % to Rp1.83 trillion during the first semester this
year, compared to Rp542.32bn for the same period last year.

Indomobil's operating expenses also rose 2.54 percent to
Rp198.63 billion for the first half this year, compared to
Rp193.72 billion for the corresponding period last year.
Total company liabilities as of June 2000 reached Rp3.24
trillion, down slightly from Rp3.27 trillion for the same
period the year before.

PT TIRTAMAS COMEXINDO: Debt-payment moratorium extended
-------------------------------------------------------
Major creditors of PT Tirtamas Comexindo have voted to
grant a 90-day extension of a suspended payment period to
allow further talks on debt restructuring.

According to Commercial Court judge Sujatno, an evaluation
of Tirtamas' assets has not been completed as of yet,
making it diffiuclt for creditors to make any informed
decisions.  He added that the creditors have approved
Tirtamas Comexindo's preliminary debt restructuring
proposal, but need more time to look into the value of
company assets.

As part of the proposal, Tirtamas has pledged its assets to
the creditors in the form of lands and account receivables,
which need verifying before their value can be determined.
Owned by Hashim Djojohadikusumo, the company had debts
totaling 1.5 trillion rupiah as of Aug 31.


=========
J A P A N
=========

CHIYODA LIFE: Looking to ally with foreign insurer
--------------------------------------------------
Chiyoda Life, one of Japan's largest but weakest life
assurance companies, is engaged in talks with several
foreign life assurance groups about forming an alliance.

Chiyoda company officials confirm the tie-up talks, but
refused to reveal the companies involved. Japanese media
suggested over the weekend that Chiyoda was seeking a large
capital injection and was in talks with a number of
prospective companies, including German insurance group
Allianz.

If a foreign group is persuaded to form an alliance with
Chiyoda, it is expected to require extensive negotiations
over the treatment of Chiyoda's existing and potential
liabilities. Japan's Financial Supervisory Agency, the main
body in charge of banking supervision, has not commented on
the case.

A published report in a Japanese newspaper claimed that
Chiyoda Life's solvency margin - the usual measure of
financial health - had declined to 263 percent in March,
down from 396 percent a year earlier. If true, it would put
the company very close to the 200 percent danger level at
which the FSA can order remedial action or closure.

Chiyoda's solvency margin has declined in recent years due
to falling investment land prices and the fact the company
has been earning less return on its assets than it has been
paying out to policyholders through their policies.

MITSUBISHI ELECTRIC: Latest scandal for business group
------------------------------------------------------
Mitsubishi Electric is recalling nearly 100,000 televisions
in Japan after admitting it concealed complaints about sets
liable to burst into flames.

Echoing a huge recall scandal at group partner Mitsubishi
Motors, the electrical arm came clean to the cover-up after
a report in the Sankei Shimbun newspaper.  Mitsubishi
Electric admitted it had failed to report to the Ministry
of International Trade and Industry (MITI) 66 customer
complaints about the defective CZ-1 and CZ-2 television
sets.

"This problem of ignition was not something that would
happen in many instances so at the time we judged it was
unnecessary to report this to MITI," said company spokesman
Matthew Nicholson.  "But looking back from the standpoint
of cause of injury or cause of property damage, that was
not an appropriate judgment at the time."

MITI official Satoshi Iwata, however, indicated the problem
could have been more widespread than Mitsubishi Electric
claimed. "Generally, household appliance makers do well in
reporting faults to us based on their agreements with us,"
Iwata said. "But in this case, Mitsubishi Electric failed
to make any reports to us. They claimed they did so because
the production errors were rare, but as we look at it more
closely now, I suspect that might not have been the case.

"We have been conducting hearings with the company since
this morning to learn exactly what caused the defects. What
kind of measures we may take will rest with the findings,"
Iwata added.

The cost of repairing the sets will be around 7,000-10,000
yen (US$66-94) each, Mitsubishi Electric director Fumio
Ookusa told a news conference.  "We changed our judgement
on our obligation to report after the Sankei Shimbun
report," he said.

A total of 50,000 CZ-1 televisions and 49,950 CZ-2s will be
either recalled or repaired by Mitsubishi Electric
engineers at Japanese customers' homes, the company said.
The sets were made from 1987 to 1990 at the firm's Kyoto
plant.  Mitsubishi Electric admitted it had failed to
report 66 complaints about the sets, which have screens
from 74 to 94 centimeters.

These Mitsubishi units emitted smoke or burst into flames
in seven of the cases.  "There were six cases involving the
CZ-1 series and one with the CZ-2 series resulting in
flames, but nobody suffered any physical harm," the
spokesman said.

The problems were caused by a build-up of humidity in the
TV sets affecting cooling parts on the circuit board,
Mitsubishi Electric said.  The case bears echoes of the
scandal that is buffeting Mitsubishi Motors, which
confessed last month to keeping the Transport Ministry in
the dark about 64,000 complaints about vehicle defects
since 1977.

That resulted last Friday in the resignation of Mitsubishi
Motors president Katsuhiko Kawasoe, and DaimlerChrysler AG
getting a cut in the price it has to pay for a 34-percent
stake in the Japanese automaker.  The Mitsubishi Electric
spokesman declined to comment on the similarities.
"Mitsubishi Motors is a separate company. I can only speak
for Mitsubishi Electric," Nicholson said. (AFP, Business
Day  13-Sept-2000)

SOGO CO.: Probing allegations of executive illegalities
-------------------------------------------------------
Sogo Co., the retailer that collapsed with nearly 2,000
billion yen (US$18.8 billion) in debt, is investigating
allegations that its former managers illegally channelled
funds from the company to a financially troubled affiliate
over more than a decade.

The probe will focus on fictitious transactions involving a
construction equipment supplier and is part of a wider
investigation being conducted into possible illegal
activity by former management.  Sogo reported Cho-ompa,
seller of water processing equipment, was one of the
companies being investigated in attempts to determine
whether former management had illegally used the group's
funds for personal gain.

Headed by a former Sogo vice-chairman, Cho-ompa is alleged
to have obtained more than 1 billion yen in unauthorized
funds from former Sogo management in promissory notes for
equipment procured, according to one newspaper report.
The charges of illegal activity by former management were
made by Sogo employees, who also allege that some of the
funds had been kept as under-the-table money, according to
Asahi.

Sogo said yesterday it was investigating the matter with a
view to taking legal action if necessary. The revelations
come as Sogo's new management is struggling to form a
restructuring programme by October 25, to save the retailer
from bankruptcy. Sogo sought court protection in July after
a failed attempt to save the company through a debt waiver.

Yesterday's revelations confirm growing suspicions that
Sogo has many skeletons in its closet that could scupper
plans to revive the group. Analysts have questioned whether
the group can be saved from bankruptcy, given the
possibility of liabilities much higher than already known.

Sogo was long under the command of former chairman, Hiroo
Mizushima, who controlled the publicly-listed group through
a complex share structure that hid many of the group's
activities from public view.  Mr Mizushima was ousted
earlier this year and forced to give up his stake in
the Sogo companies, which had provided him with control
over the group. The former chairman has been criticised for
over-expanding the group and is widely blamed for its
downfall.  (Financial Times  13-Sept-2000)

WestLB SECURITIES PACIFIC: SESC recommends penalties
----------------------------------------------------
Japan's Securities and Exchange Surveillance Commission
(SESC) is recommending that the Financial Services Agency
(FSA) punish German brokerage WestLB Securities Pacific
Ltd. for helping two Japanese insurers dress up their
financial statements.

The Tokyo branch of WestLB, an affiliate of the German bank
Westdeutsche Landesbank Girozentrale, complied with
requests by Daihyaku Mutual Life Insurance Co. and Toho
Mutual Life Insurance Co. to find lenders ready to offer
them subordinated loans, the SESC said.

After WestLB could not find such lenders, it helped the two
insurers falsify their solvency margin ratios -- a key
index of an insurer's ability to pay insurance claims.
To help fabricate the ratios, the brokerage arranged for
its own parent bank in Germany to extend the subordinated
loans, the SESC said.  As a result, Daihyaku borrowed 30
billion yen in time for its fiscal 1997 book-closing and
Toho 13 billion yen for its fiscal 1998 book-closing.

A subordinated loan can be counted as part of an insurer's
solvency margin ratio, because such a loan is junior to
other lender's claims on the same borrower even if the
borrower goes bust. Lenders agree to have such loans
treated as junior to other loans, as they yield higher
returns than ordinary loans backed by collateral.

FSA rules mandate an insurer have a ratio of over 200%. The
rules authorize the FSA to order insurers that cannot meet
the requirement to halt their operations. A solvency margin
ratio is derived by dividing the total of an insurer's
capital and contingency reserves by the sum of a range of
assets and possible insurance claims, then multiplying the
quotient by 100.

WestLB arranged for an affiliate of the parent bank to sell
a special bond contract to Daihyaku for 30 billion yen. The
contract shielded the bank from any risk that the
subordinated loan may go sour later, the commission said.
Toho also concluded a similar deal which protected the
German bank from any risk that the separate subordinated
loan, worth 13 billion yen, may go sour later, it said.

These bond arrangements "had the credit risk of the
subordinate loan flow back" to the two insurers, the
commission said in a press statement.

"WestLB carries heavy responsibility, because those
malicious transactions are tantamount to helping the two
insurers dress up their financial conditions and conceal
their actual management conditions," an SESC official said.

The German brokerage and its group companies raked in
profits worth a total of between 2 billion and 3 billion
yen through these high-yielding loan transactions, the
commission said.  But since the subordinated loans were
effectively backed by those bond contracts, they did not
really help the two insurers increase their solvency
margin ratios, although they temporarily padded out the
solvency margin ratios of the insurers "outwardly," it
said.

The two insurers engaged in these cover-up deals, while
aware that making their financial conditions look better
than they really were through these transactions was
tantamount to violating laws, the commission said.
Both insurers went insolvent later.  The Financial
Supervisory Agency, the predecessor of the FSA, ordered
Daihyaku to halt most of its operations in May this year,
while Toho went bust last year.

Meanwhile, Jens Muenster, chief of WestLB's Tokyo unit,
said Tuesday the brokerage will continue to try to improve
its operations in Japan while closely cooperating with the
FSA.  (Japan Economic Newswire  12-Sept-2000)


===============
M A L A Y S I A
===============

TIME ENGINEERING: Preparing IPO for debt paydown
------------------------------------------------
Malaysian telecom giant Time Engineering is preparing a
prospectus and sourcing for underwriters and a technology
partner for an initial public offering (IPO) for its Time
dotCom subsidiary, proceeds from which will be used to pay
down debt.

Time Engineering has denied reports that it plans to
delay the IPO by one month until November due to poor
market conditions.  Time Engineering plans to raise US$474
million from the IPO to repay debts.


=====================
P H I L I P P I N E S
=====================

FORTUNE TOBACCO CO.: Appeal urged of tax case dismissal
-------------------------------------------------------
The Department of Finance (DoF) is expected to recommend to
the Justice department to appeal a Court of Appeals
decision dismissing a 25.27-billion Philippine peso
(US$554.63 million at PhP45.562=US$1) tax evasion case
against controversial tycoon Lucio C. Tan, his flagship
Fortune Tobacco Corp. and several marketing arms.

Already, a group composed of Finance and Justice officials
is considering legal remedies the government can use for
its appeal.  "We will come up with a decision before Sept.
21," Finance Undersecretary Cornelio C. Gison said
yesterday.

The committee, created by Malaca¤ang last week to review
the case, will present its recommendations to the Justice
department.  The PhP25.27-billion tax evasion case was
dismissed early this month by the Court of Appeals due
mainly to a technicality -- the government failed to appeal
the case on time.

Records showed the Justice department last year elevated
the case to the Marikina Regional Trial Court from the
Marikina Metropolitan Trial Court 11 days after the
prescribed 60-day period.  The Court of Appeals decision
was penned by associate justice Adefuin de la Cruz, and was
concurred in by associate justices Cancio G. Garcia and
Renato C. Dacudao.

The case had the Department of Justice (DoJ) charging Mr.
Tan, officials of Fortune Tobacco and its nine marketing
firms for allegedly conniving to defraud the government of
PhP25.27 billion, representing unpaid value added and ad
valorem taxes, as well as deficiency income taxes from 1990
to 1992.

In 1998, the Justice department found basis in the
complaint filed by former Revenue commissioner Liwayway
Vinzons-Chato. But even before the case was filed with the
Marikina Metropolitan Trial Court (MeTC), Ms. Chato's
successor, Beethoven L. Rualo, recommended dismissal for
lack of evidence.  (Business World  13-Sept-2000)

JADE BANK: Owner charged with fraud
-----------------------------------
Bangko Sentral ng Pilipinas has filed charges of fraud
(estafa) through falsification of commercial documents
against Luis L. Co, founder and former president of Jade
Progressive and Mortgage Bank, and two others for
misappropriation of bank funds in the amount of P1.5
million.

The charges were filed yesterday with the Department of
Justice (DOJ) by Juan de Zuniga, Jr., BSP general counsel,
assisted by Vicente S. Aquino, director, BSP Office of
Special Investigation, and the Ongkiko, Kalaw, Manhit &
Acorda Law Offices.  This is the second set of charges
against erring bank officers to be filed by the BSP with
the DOJ in as many days.

Last Monday, the BSP and the Philippine Deposit Insurance
Corp. (PDIC) filed charges of estafa against 10 officers of
the failed Urban Bank, Inc.  Charged with Luis L. Co in the
Jade Bank case were his son, Alvin Milton S. Co, former
assistant vice president, and Myla Jardeleza, secretary of
Luis Co.

Earlier, On Aug. 11, 2000, the Monetary Board of the BSP
imposed monetary penalties and sanctions against Luis Co
and Alvin Co, including their permanent disqualification
from serving as officer or director of any financial
institution, for serious findings involving violation of
banking laws and regulations.

In the case forwarded to the DOJ, Luis Co, Alvin Co and
Myla Jardeleza were accused of authorizing the release of
P1,568,105.00 of Jade Bank funds supposedly in payment of
construction work "that was never done or even contracted
to be done" in a branch of the bank in Divisoria.  The
complaint said "respondent Luis L. Co, then President of
Jade Bank, and his son Alvin Milton S. Co. also an officer
of said bank pocketed and misappropriated this money for
their personal use and benefit to the prejudice of Jade
Bank."

Those checks issued under their instructions, in the
amounts of P505,450.00, P512,205.00 and P550,450.00, were
all "pay to cash."  According to the complaint, father and
son were able to collect the funds by falsifying documents,
including letter-billings from a construction company
called the SDL Construction and Development Corp., check
vouchers of Jade Bank authorizing the payment indicated in
the bogus letter-billings, and the official receipts issued
by SDL Construction. (Philippine Star  13-Sept-2000)

VICTORIAS MILLING CO.: Urging debt-to-equity swap
-------------------------------------------------
Management of cash-strapped sugar firm Victorias Milling
Co. (VMC) is urging its creditor banks to convert a portion
of their debt into equity to in order to further cut
repayment requirements.

The requests were made two weeks ago as a compromise
proposal with creditor banks. Disagreements between VMC
management and the banks has delayed implementation of the
company's rehabilitation plan.

After the failed sale of VMC's 53.35 percent stake in
March, creditor banks in May proposed an alternative
rehabilitation plan (ARP) for consideration by the
Securities and Exchange Commission. VMC officials, however,
then filed their own rehab plan, asserting that the banks'
plan was not viable. A VMC official claims management is
now prepared to accept the banks' plan just to get
rehabilitation under way. Compromise talks between the two
parties are ongoing.


===============
T H A I L A N D
===============

AROMATICS THAILAND: In rehab talks with creditors
-------------------------------------------------
Aromatics Thailand currently is negotiating a $373 million
debt restructuring program with its creditors. The plan is
expected to be completed and signed by year-end, by which
time the Petroleum Authority of Thailand (PTT), ATC's major
stake-owner, will have provided $90 million in emergency
funds to back up cash flow as required by share-holders.

Under the proposed plan, commercial banks have agreed to
issue fresh loans of $125 million to pay off those
disgruntled creditors, including US Exim, Korea Exim and
Japan Exim, who opposed the debt restructuring plan.
Creditors have also agreed to extend the payment period by
two years from 2007, with a grace period between now and
2004.

ATC said it expects this year's losses to narrow by 30-40
percent from 2.3 billion baht a year earlier, citing cuts
in production costs as a major factor. Additionally, the
company said it had boosted production by switching from
naphtha to condensate as the raw material in paraxylene
production, a petrochemical used to make polyester film,
packaging resin and synthetic fabrics.

Atikorn Terbsiri, ATC assistant president of Business &
Finance, attributed the improved performance to the cheaper
condensate, originating in the Gulf of Thailand.  ATC said
it had previously stopped using condensate because of
problems with quality control, but that this had since been
corrected.

The petrochemicals market has enjoyed an improved
performance this year, the company said, with paraxylene
prices climbing to US$480 per tonne from last year's
average of $360.  Greater productivity and higher profit
margins have increased the company's cash flow, enabling it
to honor recent interest payments of $17.5 million.

The same amount is due again by the year's end, and ATC has
said it fully expects to meet the deadline.  ATC defaulted
on its interest payments in 1998 and 1999 owing to a lack
of financial liquidity.  (Business Day  13-Sept-2000)

THAI PARAXYLENE: Gets recapitalization, debt extension
------------------------------------------------------
Thai Paraxylene Co, a subsidiary of Thai Oil Co, has
completed a US$230 million capital restructuring deal,
which will allows it to continue construction of a
paraxylene plant in Chon Buri that was halted for one year
because of a lack of funding.

An Industry Ministry official confirmed that 70% of the
paraxylene plant had been built and is scheduled for
completion in 2001. The plant will have a production
capacity of 300,000 tonnes a year. Currently, there are two
paraxylene plants operating in Thailand-Aromatics
(Thailand) and Exxon Chemical Co, each with an annual
production capacity of 300,000 tonnes.

A source said that under the new capital-restructuring
agreement, Thaioil's shareholding stake in Thai Paraxylene
would be reduced to 17% from 62% and Nippon Mitsubishi Oil
would maintain a 39% stake. The new investor, Petroleum
Authority of Thailand (PTT) would take a 34% stake and the
remaining 10% would be held by Japanese private companies.

Under the recapitalisation scheme, the PTT has injected $41
million and Japanese investors another $44 million. After
recapitalisation Thai Paraxylene's registered capital will
increase to $130 million from 1.29 billion baht ($32.2
million).

In addition, the Industrial Finance Corporation of Thailand
and Bank of Ayudhya, the lead lenders, agreed to provide
new loans totalling $80 million combined with a standby
loan of $5 million to assist the company. They also
extended the repayment period to 12 years from 10 years
with a grace period of two years.

The source said once the recapitalisation scheme of Thai
Paraxylene was completed, JGC Corp of Japan-the paraxylene
plant's contractor-will provide a $20 million loan to
continue the project construction. JGC has waived $17
million in accumulated interest and other expenses incurred
during the project suspension and extended the repayment of
$52 million in unpaid construction costs, to 12 years.
(Bangkok Post  13-Sept-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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