TCRAP_Public/060628.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R  
  
                     A S I A   P A C I F I C  

            Wednesday, June 28, 2006, Vol. 9, No. 127

                            Headlines

A U S T R A L I A   &   N E W  Z E A L A N D

AM HOIPO & SON: Members Resolve to Wind Up Firm
ANACON ENTERPRISES: To Declare Final Dividend on June 30
ASFORM PTY: Supreme Court Orders Wind-Up
AUSTIN GROUP: Expects 2nd Half 2006 Loss Due to Poor Sales
AWB LIMITED: S&P Retains Negative Outlook on BBB Credit Rating

BMJ INDUSTRIES: Creditors Opt to Shut Down Business
CEICYS INVESTMENTS: Enters Voluntary Liquidation
CONTACT MACHINERY: Appoints Brown and Hart as Joint Liquidators
CONTRACT MESSENGER: Creditors Must Prove Debts by September 15
COTTAGE BRICKLAYERS: Court to Hear Liquidation Bid on July 6

CROWN QUEENS: Name Johnstone as Liquidator
FORTESCUE METALS: Awards Three Key Construction Contracts
GILETE FURNITURE: Decides to Close Operations
J&D ANGUS: Members Review Wind-Up Report
J&D TOWN: Names Megan Smith as Liquidator

JAL LANDSCAPE: Court Issues Wind-Up Order
JAMES HARDIE: ATO Agrees to Partial Payment of AU$378-Mil Tax
JAMES HARDIE: ATO Refuses to Grant the SPF Tax-Exempt Status
JENNISONS TYRE: Members and Creditors Set to Meet on June 29
J WOOLCOCK: Placed Under Voluntary Liquidation

LEGEND PAPER: Prepares to Pay Dividend to Creditors
LEXINGTON HOMES: Creditors' Proofs of Claim Due on July 15
L&S INVESTMENTS: Members' Meeting Set on June 30
MARKOVO HOLDINGS: Members Decide to Wind Up Firm
MOLE DRAINAGE: Liquidation Petition Hearing Set on July 3

N.Z. EDUCATION LTD: Court to Hear Liquidation Bid on July 27
ONDEO NALCO: Liquidator to Present Wind-Up Report
POWER STUDIOS: Members and Creditors Agree on Liquidation
SAMANSU PTY: Initiates Wind-Up Proceedings
STUDIO SEVEN: Distributes Final Dividend

TOFILAU FINANCE: Shareholders Resolve to Liquidate Business
TRICOM CABLING: Winds Up Operations
VOLCANIC INVESTMENTS: Court to Hear Liquidation Petition Aug. 3
W.E.G. NOMINEES: Prepares to Close Down Business
WIN-DEY CONSTRUCTION: Faces Liquidation Proceedings


C H I N A   &   H O N G  K O N G

ACCESS TREE: Members and Creditors to Meet on July 17
ARCONTECH CORPORATION: Creditors, Contributories to Meet July 4
ART'S PUBLISHING: Court Orders Wind-Up of Operations
CHEONG SHING REPAIR: Court to Hear Wind-Up Petition on July 5
CHINA PROFIT: Members' and Creditors' Meetings Set July 17

CITIC PACIFIC: S&P Pares Credit Rating to BB+ from BBB-
FORTRESS INTERNATIONAL: Creditors Must Prove Debts by July 24
GOLD MOUNTAIN: Members' and Creditors' Meetings Fixed on July 17
GRANDSTAND HOLDINGS: Court to Hear Wind-Up Petition on July 26
KOWATEX LIMITED: To Wind Up Business After Court Order

METALFIELD LIMITED: Liquidators Cease to Act for Company
NEW PARADIGM: Faces Wind-Up Proceedings
UNIQUE RAINBOW: Receives Wind-Up Order
STIRLING DRAINAGE: Joint and Several Liquidators Step Aside
SUI CHEONG ENGINEERING: Joint Liquidators Cease to Act for Firm

* China Banks at Risk as Asian Banking Stabilizes, S&P Says


I N D I A

BANGALORE MERCANTILE: Loses License Due to Insolvency
BHARAT PETROLEUM: Plans US$1.7-Billion Refinery Upgrades
BHARTI AIRTEL: Fitch Affirms 'BB+' Issuer Default Rating
LML LIMITED: ICRA Downgrades Preference Cap Instrument to LC


I N D O N E S I A

DAVOMAS ABADI: Moody's Affirms B2 Secured Bonds Rating
PERUSAHAAN GAS: Fitch Assigns BB- Long-Term Currency IDR


J A P A N

NOMURA CAPITAL: S&P Assigns BB Rating to Class D Certificate
SOMPO JAPAN: Punishes 584 Officers for Failure to Pay Claims


K O R E A

DAEWOO SHIPBUILDING: Romanian Unit Snags US$280-Million Deal
HYNIX SEMICONDUCTOR: Shares Sale Priced at US$1.5 Billion
HYNIX SEMICONDUCTOR: Sets Sale Format with Lead Creditor KEB
HYNIX SEMICONDUCTOR: Japan's MOF Supports Countervailing Duties
HYUNDAI MOTOR: Chairman's Imprisonment Concerns Chinese Dealers

LG CARD: FSS Says No to Stake Sale & Decides on Public Tender
LG CARD: Posts KRW353.6-Billion First Quarter Net Income
SHINHAN BANK: Is Part of the FTC Anti-Cartel Probe
SHINHAN BANK: May Enter Restructuring This Year
SSANGYONG MOTOR: Posts KRW22.2-Bil Rise in 1st Quarter Net Loss

* KCC to Investigate 3 Wireless Operators for Illegal Behavior
* Korean Builders Get Record Overseas Construction Orders
* Equity and Debt Financing Increases 20.6% in May
* Fewer But Bigger Mergers in 2005


M A L A Y S I A

AYER HITAM: Inks Deal to Vary Joint Venture Agreement Terms
FEDERAL FURNITURE: Unit Inks Sale & Purchase Deal with Malayan
HARVEST COURT: Unveils 28th AGM Results
MALAYSIA AIRLINES: Members Approve All AGM Resolutions
MALAYSIA AIRLINES: Considers All Options in A380 Purchase Deal

MALAYSIA AIRLINES: Whistleblower Team to Probe 30 Complaints
METROPLEX BERHAD: OCBC Agrees to Extend Indulgence Period
METROPLEX BERHAD: 43rd Annual General Meeting Slated for July 19
MYCOM BERHAD: Government Asserts MYR4.3-Mil Claim Against Unit
POLYMATE HOLDINGS: Hong Leong Bank Files Claims Payment Suit

PROTON HOLDINGS: To Enter Indonesian Retail Market in 2007
* Malaysia Eyes Sustained Deficit of 3%-3.5% of GDP


P H I L I P P I N E S

METRO PACIFIC: SEC Approves New Investment Firm
NATIONAL POWER: ERC OKs Power Generation Rates


S I N G A P O R E

LEIGHTON INVESTMENTS: Accepting Proofs of Debt Until July 23
HESHE HOLDINGS: SGX-ST OKs Listing & Quotation of Rights Shares
MAE ENGINEERING: Fixes Books Closure Date on July 11
PERPETUAL HOLDINGS: Wind-Up Petition Hearing Slated for June 30
ROGERS WORLDWIDE (S): Court to Hear Wind-Up Petition on June 30

SEARA FOOD: Creditors Must Prove Debts by July 23
WORLD DIGITAL: To Hold Creditors Meeting on July 17


T H A I L A N D

NAKORNTHAI STRIP: To Sell Secured Rights to G Steel Pcl
PAE THAILAND: Board Approves Change in Share Par Value


* Asian Bank Systems Continue to Face Economic Risks, S&P Says

     - - - - - - - -

============================================  
A U S T R A L I A   &   N E W  Z E A L A N D
============================================  

AM HOIPO & SON: Members Resolve to Wind Up Firm
-----------------------------------------------
After their general meeting on May 18, 2006, the members of
AM Hoipo & Son Pty Limited decided to voluntarily wind up the
Company's operations.

In this regard, Garth D. Olling was appointed as liquidator.

Contact: Garth D. Olling
         Liquidator
         Grant Thornton
         Level 17, 383 Kent Street
         Sydney, New South Wales 2000
         Australia


ANACON ENTERPRISES: To Declare Final Dividend on June 30
--------------------------------------------------------
Anacon Enterprises Pty Limited will declare its first and final
dividend on June 30, 2006.

Creditors who were not able to prove their claims will be
excluded from sharing in any distribution the Company will make.

Contact: John Morgan
         Liquidator
         PKF Chartered Accountants
         Level 10, 1 Margaret Street
         Sydney, New South Wales 2000
         Australia


ASFORM PTY: Supreme Court Orders Wind-Up
----------------------------------------
The Supreme Court of New South Wales ordered Asform Pty Limited
to wind up its operations, and appoint Geoffrey McDonald as
liquidator.

Contact: Geoffrey McDonald
         Liquidator
         Hall Chadwick
         Level 29, 31 Market Street
         Sydney, New South Wales 2000
         Australia
         Telephone: (02) 9263 2600
         Fax: (02) 9263 2800


AUSTIN GROUP: Expects 2nd Half 2006 Loss Due to Poor Sales
----------------------------------------------------------
Austin Group Ltd. will post a loss for the second half of the
financial year, thus, will not be paying a final dividend, the
Australian Associated Press reports.

According to the report, the Company warned in April that it
expected sales across all its divisions to be weaker in the six
months to June 2006, with men's wear as the hardest hit.

The Age recounts that Austin's revenue for the second half of
2004/05 was about AU$27.43 million, with full-year revenue
reaching AU$61 million and full-year net profit reaching
AU$4 million.

In a disclosure with the Australian Stock Exchange, Austin said
that despite the disappointing trading result for the winter
2006 season, the outlook for the first half of financial year
2006/07 remains positive with the Company having arrested the
decline in its sales and earnings.

Austin said that forward orders were encouraging and in line
with last year.  It also stated that it is confident its summer
2006 earnings would be in line with the previous corresponding
period.  Austin also revealed that it has signed license
agreements for children's wear brand "Mini Minors" and for the
swimwear category of Bardot women's wear.

The Company remains committed to paying an interim dividend of
at least three cents for the first half of 2006/07, The
Australian notes.

Austin Group has appointed corporate advisory firm Kidder
Williams to help it pursue its growth strategy in 2006/07 and
beyond, the AAP cites Chairman Brian Beattie as saying.

Austin Group -- http://www.austingroup.com.au/-- was founded in  
1982 as a designer, importer and wholesaler of apparel.  
Throughout the 1990s, the Group acquired other businesses, which
resulted in high debt.  It was publicly listed in 1993, at which
time the Company was in a middle of what press reports dubbed as
a troubled acquisition and expansion program into home wares.  
By 1999, Austin bailed out of its other businesses to focus on
traditional and profitable core business units.  It sold its
non-core businesses to repay bank debts.  The Company continues
to be saddled by weak sales, and diminishing profits.


AWB LIMITED: S&P Retains Negative Outlook on BBB Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services retains AWB Ltd.'s 'BBB'
long-term corporate credit rating on negative outlook after the
Australian federal government's decision to extend the deadline
for the inquiry into AWB's involvement in the United Nation's
Oil-for-Food Programme to September 29, 2006.

As reported in the Troubled Company Reporter -- Asia Pacific on
April 6, 2006, Standard & Poor's Ratings Services affirmed its
'BBB' long-term corporate credit rating on AWB Ltd. and revised
the outlook to negative from stable after the Federal
Government extended the inquiry into AWB's role in the United
Nations Oil-for-Food Programme and, allowed the limited export
of bulk wheat by a group of grain companies, Wheat Australia
Ltd.

Standard & Poor's will be in a position to update the rating
when the OFF program inquiry delivers its recommendations to the
federal government.  If these recommendations diminish AWB's
role as operator of the single desk, the rating could be
lowered.  Likewise, if the OFF program inquiry's findings are
critical of AWB management, this could have a detrimental effect
on the company's ability to continue to expand its integrated
agribusiness.

While there are no legal cases pending, if the OFF program
inquiry recommends legal proceedings that could impose financial
penalties on AWB, the credit impact would have to be assessed at
that point in time.

Standard & Poor's would also seek to determine the medium-term
and long-term implications of the potential ability of other
parties being able to supply bulk wheat shipments from the
nation's wheat pool.

                          About AWB   

AWB Limited -- http://www.awb.com.au/-- is Australia's leading  
agribusiness and one of the world's largest wheat marketing
companies.  It is also one of Australia's top 100 publicly
listed companies.  The Company is the exclusive manager and
marketer of all Australian bulk wheat exports through what is
known as the Single Desk.  The Company markets wheat, and a
range of other grains, into more than 50 countries, with
Australian wheat exports worth up to $5 billion per year.  AWB's
footprint includes more than 430 outlets through its subsidiary
landmark and has offices across the world.  The company employs
more than 2,700 staff reaching over 100,000 customers.  AWB is
also one of the nation's largest suppliers of rural merchandise,
distributors of fertilizer, marketers of livestock, brokers of
rural real estate and handlers of wool.  

Previously a low profile organization, AWB made headlines in
late 2005 when it was accused of knowingly paying AU$290 million
in kickbacks to the Government of Iraq, under Saddam Hussein's
administration, through the United Nation's oil-for-food
program.  A UN report then found out that AWB paid the kickbacks
to a Jordanian trucking company linked to Hussein's deposed
regime.  The Australian Government then appointed a commission,
headed by retired judge Terence Cole, to investigate into the
Company's role in and the Government's alleged "knowledge" of
the scandal.  The "Cole Inquiry" is currently underway.  The
scandal is anticipated to create great political repercussions
to the Australian Government, given the country's contribution
to military action against President Hussein in the 2003
invasion of Iraq.


BMJ INDUSTRIES: Creditors Opt to Shut Down Business
---------------------------------------------------
The creditors of BMJ Industries Pty Limited held a meeting on
May 17, 2006, and agreed to shut down the Company's business
operations.

They also decided to appoint Daniel Cvitanovic as liquidator.

Contact: Daniel Cvitanovic
         Liquidator
         Shop 5, Old Potato Shed
         74-76 Hoddle Street, Robertson
         New South Wales 2577, Australia
         Telephone: (02) 4885 2500
         Fax: (02) 4885 2995


CEICYS INVESTMENTS: Enters Voluntary Liquidation
------------------------------------------------
At a general meeting of the members of Ceicys Investments Pty
Limited on May 17, 2006, it was agreed that a voluntary wind-up
of the Company is appropriate and necessary.

In that regard, Anthony Robert Grieves was appointed as
liquidator.

Contact: Anthony Robert Grieves
         Liquidator
         WalterTurnbull
         44 Sydney Avenue, Barton
         Australian Capital Territory 2600
         Australia
         Telephone: (02) 6247 6200
         Fax: (02) 6257 6655


CONTACT MACHINERY: Appoints Brown and Hart as Joint Liquidators
---------------------------------------------------------------
Kenneth Peter Brown and Sheree Ann Hart were on June 12, 2006,
appointed liquidators to act jointly and severally for Contact
Machinery Ltd 2000 Ltd.

Contact: K.P. Brown
         C/O Rodewald Hart Brown Limited
         127 Durham Street (P.O. Box 13-380)
         Tauranga, New Zealand
         Telephone: (07) 571 6280
         Web site: www.rhb.co.nz


CONTRACT MESSENGER: Creditors Must Prove Debts by September 15
--------------------------------------------------------------
Vivian Judith Fatupaito and Richard Dale Agnew were on June 15,
2006, appointed as joint and several liquidators of Contract
Messenger Services Ltd.

The Liquidators now require the Company's creditors to submit
their proofs of debt by September 15, 2006, for them to share in
any distribution the Company will make.

Contact:  Vivian Fatupaito
          PricewaterhouseCoopers, Level 8
          PricewaterhouseCoopers Tower
          188 Quay Street, Auckland
          New Zealand
          Telephone: (09) 355 8000
          Facsimile: (09) 355 8013


COTTAGE BRICKLAYERS: Court to Hear Liquidation Bid on July 6
------------------------------------------------------------
The Accident Compensation Commission on May 11, 2006, filed
before the High Court of Auckland an application to liquidate
Cottage Bricklayers Ltd.

The High Court will hear the said application on July 6, 2006,
at 10:45 a.m.

Parties interested to attend the hearing are required to submit
an appearance not later than June 4, 2006.

Contact: Dianne Lester
         Maude & Miller
         2nd Floor, McDonald's Building
         Cobham Court, Porirua City
         New Zealand


CROWN QUEENS: Name Johnstone as Liquidator
------------------------------------------
The shareholders of Crown Queens Ltd appointed Roger Johnstone
as liquidator on June 10, 2006.

Mr. Johnstone now requires the Company's creditors to submit
their proofs of claim by July 20, 2006.

Contact: Roger Johnstone
         P.O. Box 35-825
         Browns Bay, Auckland
         New Zealand
         Telephone/Facsimile: (09) 473 1139


FORTESCUE METALS: Awards Three Key Construction Contracts
----------------------------------------------------------------
Consistent with its timeline for final commissioning in its
Pilbara iron mine project in the first quarter of 2008,
Fortescue Metals Group Ltd., has awarded three key contracts to:

   1. Metso Minerals (Australia) Pty. Ltd., for the design,
      manufacture, and commissioning of the train unloader at
      Anderson Point in Port Hedland;

   2. FFE Minerals for the design, manufacture, installation,
      and commissioning of Excel 1100 crushers at the Cloud
      Break mine site;

   3. BGC Contracting for earthworks and culvert construction
      along the entire 255-kilometer route of the rail line.

Commenced contracts are also on schedule with these milestones:

   * Dredging work will start on the second week of July 2006 --
     with piping currently being assembled to deposit the dredge
     spoils over Fortescue's port stockpile site -- which was
     confirmed by the dredge contractor, Jan de Nuls; and

   * The port earthworks program, which commenced in February
     2006, is nearing completion of stage one -- the
     construction of bunding around the site perimeter together
     with the construction of the causeway out to the ship
     loading site.

"The initial port earthworks are being conducted on time and
under budget, and the various new contracts have been executed
in accordance with the project timeline allowing us to maintain
the project's momentum," Fortescue Executive Director of
Operations Graeme Rowley says.

Fortescue's development of its "open access" port and rail
network will transport ore from its wholly owned mining
operations at Cloud Break and Christmas Creek in the Pilbara
along a 255-km rail line to Port Hedland.  The recent completion
of the Definitive Mining Study by Snowden Mining Industry
Consultants confirmed the parameters for Fortescue to develop
its mine at Cloud Break, with initial production of 45 million
tonnes per annum after a 15-month ramp-up period from first ore
production.

Mr. Rowley further notes that "the project is being developed in
a very exciting time for the world's iron ore industry.  Supply
shortages against ever growing demand have resulted in long tem
iron ore contract price increases of 90% over the last two
years.  Fortescue is planning to be producing ore within 18
months and our forecasting suggests that strong iron ore demand
coming from China will be driving the market for decades to
come."

                       About Fortescue  

Headquartered in West Perth, Western Australia, Fortescue Metals
Group Limited -- http://fmgl.com.au/-- is involved in the  
exploration of iron ore through a project to mine iron ore in
the Chichester Ranges, in the Pilbara region of Western
Australia and exporting it from Port Hedland.

Fortescue's troubles began when its Chief Executive Officer,
Andrew Forrest, admitted to a AU$500-million blowout on the cost
of port and rail infrastructure in the Pilbara Project because
of price hikes for steel, fuel, construction materials and
contract labor.  The Company also disclosed that the hampered
progress brings in the possibility that the Company may not meet
its ore delivery schedule and pushes up costs at resource
developments across Western Australia.  In May 2005, the
Australian Stock Exchange pressured Fortescue to explain matters
about the project and to explain how the Company would be able
to dispose of its lower grade order for 95% of the price
obtained by rivals BHP Billiton and Rio Tinto for their top-
quality products.  The ASX referred the Fortescue matter to the
Australian Securities and Investments Commission, which recently
commenced a legal action against the Company.

The ASIC alleges that Fortescue is engaged in misleading and
deceptive conduct and has failed to comply with its continuous
disclosure obligations when it announced various contracts with
Chinese entities on Aug. 23 and November 5, 2004.  In
particular, Fortescue did not disclose that the Chinese parties
had not reached a concluded agreement on fundamental aspects of
the projects and they had merely agreed that they would in the
future jointly develop and agree on the "agreed" matters.  The
ASIC is seeking civil penalties of up to AU$3 million against
Fortescue.


GILETE FURNITURE: Decides to Close Operations
---------------------------------------------
At a general meeting of Gilete Furniture Pty Limited held on
May 17, 2006, creditors opted to wind up the Company's
operations and appoint Martin Jones and Darren Weaver as
liquidators.

Contact: Martin Jones
         Darren Weaver
         Liquidators
         Ferrier Hodgson Chartered Accountants
         Level 26, 108 St. George's Terrace
         Perth, Western Australia
         Australia


J&D ANGUS: Members Review Wind-Up Report
----------------------------------------
Members of J&D Angus Investments Pty Limited will hold a final
meeting on June 30, 2006, at 10:00 a.m., for them to receive
Liquidator John S. Watson's final account showing how the
Company was wound up and how its property was disposed of.

Contact:  John S. Watson
          Liquidator
          LBW & Partners
          Ground Floor, 19 Havilah Street
          Chatswood, New South Wales 2067
          Australia


J&D TOWN: Names Megan Smith as Liquidator
-----------------------------------------
Members of J&D Town Pty Limited convened on May 15, 2006, and
agreed to liquidate the Company's business operations.

Megan Smith was subsequently appointed liquidator.

Contact: Megan Smith
         Liquidator
         Level 2, 175 Scott Street
         Newcastle New South Wales 2300
         Australia


JAL LANDSCAPE: Court Issues Wind-Up Order
-----------------------------------------
The Supreme Court of New South Wales had on May 8, 2006, issued
a wind-up order against JAL Landscape & Construction Pty
Limited.

The Court also named Steven Nicols as liquidator.

Contact: Steven Nicols
         Liquidator
         Level 2, 350 Kent Street
         Sydney, New South Wales 2000
         Australia


JAMES HARDIE: ATO Agrees to Partial Payment of AU$378-Mil Tax
-------------------------------------------------------------
The Australian Taxation Office has agreed to a part-payment of a
AU$378-million amended assessment received by one of James
Hardie Industries Limited's subsidiary companies, RCI Pty
Limited, in respect of tax for 1999 financial year.

The Troubled Company Reporter - Asia Pacific reported on
March 24, 2006, that the tax assessment relates to the
calculation of net capital gains tax following James Hardie's
transfer of its United States assets -- particularly the
operations of subsidiary RCI Pty -- to a Dutch holding company,
James Hardie Industries NV, in its effort to minimize tax and as
part of its restructure in 1998-99.

The amended assessment was received on March 22, 2006.  The ATO
reduced the general interest charge from AU$197 million to
AU$163 million.

The ATO determined that AU$189 million is required as part-
payment on the later of June 30, 2006, or when amending
legislation to validate the amended assessment is enacted as a
result of receiving royal assent.

The balance of the amended assessment is to be secured by a
guarantee by JHNV in favor of the ATO.  To ensure that the
unpaid balance does not increase, James Hardie will pay its
incremental general interest charge in quarterly installments in
arrears.

The other components of the AU$378 million are primary tax of
AU$172 million and penalties of AU$43 million.

James Hardie says it continues to dispute the amended assessment
and will pursue all avenues of objection and appeal to contest
the ATO's position on the matter.

The Company believes that its tax position will ultimately
prevail based on legal and tax advice both at the time of the
transaction and during ATO inquiries.

James Hardie has previously stated that it understands the ATO
accepted that it has a "reasonably arguable position," which
means that the ATO must have concluded that, having regard to
relevant case law and other authorities, it is about as likely
as not that the Company's position is correct.

The Company explains that under the law, "reasonably arguable
position" means that the additional penalty of 50% of the tax
that otherwise would automatically apply in Part IVA cases will
be reduced to 25%, as is the case in this instance.

James Hardie's application for part-payment of the amended
assessment was made in accordance with ATO policy and results in
the ATO agreeing to reduce the rate that the Company accrues
interest on the unpaid balance from the current level to half
the prevailing general interest charge rate.

The general interest charge is tax deductible.

The Company has adequate available cash and existing unutilized
debt facilities to meet payment obligations under the amended
assessment.

                       About James Hardie  

James Hardie Industries Limited -- http://www.jameshardie.com/
-- manufactures, markets and distributes fiber cement and gypsum
products, fiberglass reinforced plastic and PVC products,
sanitary ware and bathroom products, insulating materials and
fillers, strippers and adhesives.  On July 2, 1998, the then
public company announced a plan of reorganization and capital
restructuring.  James Hardie N.V. was incorporated in August
1998 as an intermediary holding company, with all of its common
stock owned by indirect subsidiaries of JHIL.  Effective as of
November 1998, JHIL contributed its fibre cement businesses, its
United States gypsum wallboard business, its Australian and New
Zealand building systems businesses and its Australian windows
business to JHNV and its subsidiaries.

On July 24, 2001, JHIL announced a further plan of
reorganization and capital restructuring, which was completed on
October 19, 2001.  In connection with the 2001 Reorganization,
James Hardie Industries N.V., formerly RCI Netherlands Holdings
B.V., issued common shares represented by CHESS Units of Foreign
Securities on a one for one basis to existing JHIL shareholders
in exchange for their shares such that JHINV became the new
ultimate holding company for JHIL and JHNV.  Following the 2001
Reorganization, JHINV controls the same assets and liabilities
as JHIL controlled immediately prior to the 2001 Reorganization.

The Company's troubles began with its "under-funded" allocation
for asbestos claims, which were brought in by people who suffer
or may have diseases caused by exposure to the asbestos-related
products produced by JHIL.  In 2001, James Hardie set up an
independent entity, Medical Research and Compensation
Foundation, to handle asbestos claims.  The Foundation has
warned that it could run out of money within five years.  The
Asbestos Diseases Foundation of Australia and workers unions
called for all the Company's asbestos profits to be immediately
placed in the fund.  James Hardie was later accused of topping
up the dwindling asbestos fund it established.  By 2004, James
Hardie's former asbestos manufacturing subsidiaries -- Amaca Pty
Ltd, Amaba Pty Ltd, and ABN 60 Pty Ltd -- are three of around
150 defendants in asbestos litigation, and based on the
Foundation's own figures, they account for US$1,000,000,000 of
the predicted US$6,000,000,000 future asbestos liabilities in
Australia.  Although James Hardie stopped making asbestos
products in 1987, the average 35-year latency of mesothelioma,
an asbestos-related disease, means asbestos compensation funds
will be needed until mid-century.  In a 2005 report by a
company-hired actuary from KPMG, it was predicted that 4,915
Australians would contract mesothelioma from exposure to Hardie
products in the coming decades.  When less serious forms of
asbestos-related disease are included, James Hardie should
expect to compensate 8,725 victims.

On December 1, 2005, the Company announced that the NSW
Government and a wholly owned Australian subsidiary of the
Company -- LGTDD Pty Ltd -- had entered into a conditional
agreement to provide long-term funding to a special purpose fund
that will provide compensation for Australian asbestos-related
personal injury claims against certain former James Hardie
asbestos companies.  The amount of the asbestos provision of
AU$1 billion, at March 31, 2006, is the Company's best estimate
of the probable outcome, which estimate includes an actuarial
calculation prepared by KPMG Actuaries Pty Ltd of the projected
future cash outflows, undiscounted and uninflated, and the
anticipated tax deduction arising from Australian legislation
which came into force on April 6, 2006.


JAMES HARDIE: ATO Refuses to Grant the SPF Tax-Exempt Status
------------------------------------------------------------
The Australian Taxation Office has refused to endorse the
Special Purpose Fund as a tax concession charity.  The SPF was
established under the Final Funding Agreement entered into by
James Hardie Industries Ltd. and the NSW Government on Dec. 1,
2005, to manage future asbestos compensation payments.

The ATO has argued that the scope of activities of the SPF as
agreed under the Final Funding Agreement does not meet current
legislative requirements for endorsement as a charity and
therefore would not be exempt from income tax.

The primary activity of the SPF is to make compensation
payments, over a period of at least 40 years and potentially
much longer, to Australian asbestos victims who would otherwise
be left with claims against current subsidiaries of the Medical
Research and Compensation Foundation.  The Foundation has
indicated it expects its current funding to be exhausted later
this year.

James Hardie Chief Executive Officer Louis Gries asserts that
there were good grounds for the ATO to grant the fund income tax
exempt status.  He says that the SPF should have qualified for
tax-exempt status under existing tax laws applicable to
charitable funds.

"This development places the viability of the Final Funding
Agreement in doubt.  James Hardie will discuss this development
with its stakeholders, including the NSW Government, the ACTU
and Asbestos Support Groups," Mr. Gries says.

The parties to the Heads of Agreement, which was signed in
December 2004 agreed that the SPF's exemption from Australian
income tax was critical to the long term viability and
affordability of the SPF.  The ATO's endorsement is necessary to
achieve that exemption, and was therefore a condition precedent
to the implementation of the Final Funding Agreement, to which
the SPF has subsequently become a party.

The Company had gotten itself into the situation by trying to
move its business offshore, Federal Treasurer Peter Costello
says.  "Having done that, they have now got themselves in a
terrible tax situation which they tried to extricate themselves
from," The Age cites Mr. Costello telling Southern Cross
Broadcasting.

According to the Couriermail, James Hardie has also accused the
Federal Government of using the fund as a "windfall" for
Treasury.

James Hardie chairwoman Meredith Hellicar said the Government's
stance was inconsistent, pointing to the lack of taxation on the
company's original compensation fund, the Couriermail relates.

The report also notes that ACTU secretary Greg Combet says that
taxpayers are not asked to foot any bill in relation to James
Hardie compensation payments.  However, taxation arrangements
need to be properly structured because the company must be
viable for people to get their payments in the years to come,
Mr. Combet says.

Asbestos victim Bernie Banton, who led a long campaign for
proper compensation for the victims, seeks the Government's
reconsideration of its position.  He asserts that Prime Minister
John Howard and Mr. Costello have a moral obligation to
intervene and make sure there is adequate support for the tens
of thousands of Australians who will be killed by asbestos.

Mr. Costello maintains that James Hardie should not be allowed
to walk out of its obligations.

The SPF's application for endorsement as a tax concession
charity is separate from James Hardie's application to the ATO
for a private ruling for tax deductibility of the contributions
to be made by James Hardie to the SPF in accordance with the
Final  Funding Agreement.  James Hardie is awaiting a response
from the ATO regarding this ruling application, which is
expected next month.

"We will wait and see what the second ruling is," the Australian
Associated Press cites Mr. Costello as saying, adding that other
companies subjected to asbestos claims have managed to cover
costs.

                       About James Hardie  

James Hardie Industries Limited -- http://www.jameshardie.com/
-- manufactures, markets and distributes fiber cement and gypsum
products, fiberglass reinforced plastic and PVC products,
sanitary ware and bathroom products, insulating materials and
fillers, strippers and adhesives.  On July 2, 1998, the then
public company announced a plan of reorganization and capital
restructuring.  James Hardie N.V. was incorporated in August
1998 as an intermediary holding company, with all of its common
stock owned by indirect subsidiaries of JHIL.  Effective as of
November 1998, JHIL contributed its fibre cement businesses, its
United States gypsum wallboard business, its Australian and New
Zealand building systems businesses and its Australian windows
business to JHNV and its subsidiaries.

On July 24, 2001, JHIL announced a further plan of
reorganization and capital restructuring, which reorganization
was completed on October 19, 2001.  In connection with the 2001
Reorganization, James Hardie Industries N.V., formerly RCI
Netherlands Holdings B.V., issued common shares represented by
CHESS Units of Foreign Securities on a one for one basis to
existing JHIL shareholders in exchange for their shares such
that JHINV became the new ultimate holding company for JHIL and
JHNV.  Following the 2001 Reorganization, JHINV controls the
same assets and liabilities as JHIL controlled immediately prior
to the 2001 Reorganization.

The Company's troubles began with its "under-funded" allocation
for asbestos claims, which were brought in by people who suffer
or may have diseases caused by exposure to the asbestos-related
products produced by JHIL.  In 2001, James Hardie set up an
independent entity, Medical Research and Compensation
Foundation, to handle asbestos claims.  The Foundation has
warned that it could run out of money within five years.  The
Asbestos Diseases Foundation of Australia and workers unions
called for all the Company's asbestos profits to be immediately
placed in the fund.  James Hardie was later accused of topping
up the dwindling asbestos fund it established.  By 2004, James
Hardie's former asbestos manufacturing subsidiaries -- Amaca Pty
Ltd, Amaba Pty Ltd, and ABN 60 Pty Ltd -- are three of around
150 defendants in asbestos litigation, and based on the
Foundation's own figures, they account for US$1,000,000,000 of
the predicted US$6,000,000,000 future asbestos liabilities in
Australia.  Although James Hardie stopped making asbestos
products in 1987, the average 35-year latency of mesothelioma,
an asbestos-related disease, means asbestos compensation funds
will be needed until mid-century.  In a 2005 report by a
company-hired actuary from KPMG, it was predicted that 4,915
Australians would contract mesothelioma from exposure to Hardie
products in the coming decades.  When less serious forms of
asbestos-related disease are included, James Hardie should
expect to compensate 8,725 victims.

On December 1, 2005, the Company announced that the NSW
Government and a wholly owned Australian subsidiary of the
Company -- LGTDD Pty Ltd -- had entered into a conditional
agreement to provide long-term funding to a special purpose fund
that will provide compensation for Australian asbestos-related
personal injury claims against certain former James Hardie
asbestos companies.  The amount of the asbestos provision of
AU$1 billion, at March 31, 2006, is the Company's best estimate
of the probable outcome, which estimate includes an actuarial
calculation prepared by KPMG Actuaries Pty Ltd of the projected
future cash outflows, undiscounted and uninflated, and the
anticipated tax deduction arising from Australian legislation
which came into force on April 6, 2006.


JENNISONS TYRE: Members and Creditors Set to Meet on June 29
------------------------------------------------------------
A final meeting of the members and creditors of Jennisons Tyre
Services Pty Limited will be conducted on June 29, 2006.

During the meeting, Liquidator R. A. Ferguson will give the
accounts of the Company's wind-up proceedings.

Contact: R. A. Ferguson
         Liquidator
         c/o Fergusons Chartered Accountants
         Level 8, 115 Grenfell Street
         Adelaide, South Australia 5000
         Australia
         

J WOOLCOCK: Placed Under Voluntary Liquidation
----------------------------------------------
The members of J Woolcock Pty Limited met on May 18, 2006, and
agreed to:

  -- voluntarily wind up the Company's business operations; and

  -- appoint Anthony Wayne Elkerton as liquidator to manage the    
     wind-up activities.

Contact: Anthony W. Elkerton
         Liquidator
         Pitcher Partners
         Level 3, 60 Castlereagh Street
         Sydney, New South Wales 2000
         Australia


LEGEND PAPER: Prepares to Pay Dividend to Creditors
---------------------------------------------------
Legend Paper Converting Pty Limited will declare its first and
final dividend to preferred unsecured creditors on June 3, 2006,
to the exclusion of creditors who were unable to prove their
claims.

Contact: T. J. Clifton
         M. C. Hall
         Liquidators
         PPB Chartered Accountants
         10th Floor, 26 Flinders Street
         Adelaide, South Australia 5000
         Australia
         Telephone: 8211 7800


LEXINGTON HOMES: Creditors' Proofs of Claim Due on July 15
----------------------------------------------------------
Robin Winston Hargrave was named official liquidator of
Lexington Homes Ltd after the commencement of the Company's
liquidation on June 16, 2006.

Mr. Hargrave now requires the Company's creditors to submit
their proofs of claim by July 15, 2006.

Failure to comply with the requirement will exclude a creditor
from sharing in any distribution the Company will make.

Contact: Robin Winston Hargrave
         O'Halloran HMT Ltd
         P.O. Box 6004, Wellesley Street
         Auckland, New Zealand
         Telephone: (09) 366 5065
         Facsimile: (09) 366 5001


L&S INVESTMENTS: Members' Meeting Set on June 30
------------------------------------------------
The members of L&S Investments Proprietary Limited will convene
on June 30, 2006, to get an account of the manner of the
Company's wind-up and property disposal from Liquidator John S.
Watson.

Contact: John S. Watson
         Liquidator
         LBW & Partners
         Ground Floor, 19 Havilah Street
         Chatswood, New South Wales 2067
         Australia


MARKOVO HOLDINGS: Members Decide to Wind Up Firm
------------------------------------------------
At a general meeting of Markovo Holdings Pty Limited on May 19,
2006, members agreed that it is in the Company's best interests
to wind up its operations.

In this regard, Nicholas Crouch was appointed as liquidator.

Contact: Nicholas Crouch
         Liquidator
         Crouch Insolvency Chartered Accountants
         Level 28, 31 Market Street
         Sydney, New South Wales 2000
         Australia


MOLE DRAINAGE: Liquidation Petition Hearing Set on July 3
---------------------------------------------------------
The High Court of Auckland will hear a petition to liquidate
Mole Drainage Services Ltd on July 3, 2006, at 10:45 a.m.

Regal Haulage NZ Ltd filed the petition before the Court on
May 31, 2006.

Contact: Malcolm David Whitlock
         Whitlock & Co
         C/O Level Two, Baycorp Advantage House
         15 Hopetoun Street, Auckland
         New Zealand


N.Z. EDUCATION LTD: Court to Hear Liquidation Bid on July 27
------------------------------------------------------------
Manchester Property Care Ltd on May 19, 2006, filed before the
High Court of Auckland a petition to liquidate New Zealand
Education Ltd -- trading as Sterling College.

The High Court will hear the petition on July 27, 2006, at 10:00
in the morning.

Contact: Malcolm Whitlock
         Debt Recovery Group NZ Limited
         149 Ti Rakau Drive, Pakuranga
         Postal Address: P.O. Box 259 059
         Burswood, Auckland
         New Zealand


ONDEO NALCO: Liquidator to Present Wind-Up Report
-------------------------------------------------
The members of Ondeo Nalco Energy Services Pty Limited will
convene at a final meeting on June 30, 2006, at 10:00 a.m.

During the meeting, Liquidators David Clement Pratt and Timothy
James Cuming will present accounts of the Company's wind-up and
property disposal.

Contact: Timothy J. Cuming
         David C. Pratt
         Liquidators
         PricewaterhouseCoopers
         Level 15, 201 Sussex Street
         Sydney, New South Wales 1171
         Australia


POWER STUDIOS: Members and Creditors Agree on Liquidation
---------------------------------------------------------
At a meeting on May 16,2006, the members and creditors of Power
Studios Pty Limited decided to voluntarily wind up the Company's
operations.

Russell Graeme Peake and Philip John McGibbon were consequently
appointed as liquidators.

Contact: Philip J. McGibbon
         Russell G. Peake
         Liquidators
         Jenkins Peake & Co.
         PO Box 1570, Geelong 3220
         Australia
         Telephone: (03) 5223 1000
         Fax: (03) 5221 4938


SAMANSU PTY: Initiates Wind-Up Proceedings
------------------------------------------
The members of Samansu Pty Limited met on May 15, 2006, and
agreed to wind up the Company's business voluntarily.

They consequently named Leslie Glenn Karutz as liquidator.

Contact: Leslie G. Karutz
         Liquidator
         RSM Bird Cameron
         4 Eyre Street, Port Lincoln
         Australia


STUDIO SEVEN: Distributes Final Dividend
----------------------------------------
Studio Seven Pty Limited will distribute its final dividend on
June 30, 2006.

Creditors who were not able to prove their claims are excluded
from sharing in the dividend distribution.

Contact: E. M. Senatore
         Liquidator
         Senatore Brennan Rashid DFK
         Level 7, 28 University Avenue
         Canberra, Australian Capital Territory 2601
         Australia
         Telephone: (02) 6214 6700
         Fax: (02) 6214 6799


TOFILAU FINANCE: Shareholders Resolve to Liquidate Business
-----------------------------------------------------------
Shareholders of Tofilau Finance Ltd resolved on June 9, 2006, to
voluntarily liquidate the Company.

Subsequently, Stephen Mark Lawrence and Anthony John McCullagh
were appointed as joint and several liquidators.

The joint and several liquidators require the Company's
creditors to submit their proofs of claim by July 17, 2006.

Contact: S. M. Lawrence
         Horwath Corporate (Auckland) Limited
         P.O. Box 3678, Auckland 1015
         New Zealand
         Telephone: (09) 306 3440
         Facsimile: (09) 302 0536


TRICOM CABLING: Winds Up Operations
-----------------------------------
At a meeting of the members of Tricom Cabling Services Pty
Limited on May 17, 2006, it was agreed that it is in the
Company's best interests to wind up its operations.

Creditors subsequently appointed Paul Vartelas as liquidator.

Contact: Paul Vartelas
         Liquidator
         B. K. Taylor & Co.
         8th Floor, 68 St. Kilda Road
         Melbourne, Australia


VOLCANIC INVESTMENTS: Court to Hear Liquidation Petition Aug. 3
---------------------------------------------------------------
The High Court of Auckland will hear the petition to liquidate
S.M.Chan & Partners Ltd on August 3, 2006, at 10:45 a.m.

The Citywide Engineering Ltd filed the petition before the Court
on May 31, 2006.

Contact: C.N. Lord
         Messrs Craig Griffin & Lord, Solicitors
         187 Mt Eden Road, Mt Eden
         Postal Address: P.O. Box 9049, Newmarket
         Auckland, New Zealand


W.E.G. NOMINEES: Prepares to Close Down Business
------------------------------------------------
At a meeting held on May 18, 2006, members of W.E.G. Nominees
Pty Limited resolved to close the Company's business operations
and distribute the proceeds of its assets disposal.

Subsequently, Nicholas Crouch was appointed as liquidator.

Contact: Nicholas Crouch
         Liquidator  
         Crouch Insolvency Chartered Accountants
         Level 28, 31 Market Street
         Sydney, New South Wales 2000
         Australia


WIN-DEY CONSTRUCTION: Faces Liquidation Proceedings
---------------------------------------------------
An application to liquidate Win-Dey Construction Ltd will be
heard before the High Court of Wellington on July 3, 2006, at
10:00 a.m.

Altherm Aluminum (Manawatu) Ltd filed the petition with the
Court on May 26, 2006.

Parties wishing to attend the hearing are required to file
appearance not later than June 30, 2006.

Contact: Lawrence Florentine
         Jacobs Florentine, Solicitors
         470 Main Street (P.O. Box237, Palmerston North)
         80-019, Broadway
         New Zealand

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

ACCESS TREE: Members and Creditors to Meet on July 17
-----------------------------------------------------
Members and creditors of Access Tree Industrial Ltd will convene
on July 17, 2006 at 10:00 a.m. and 10:15 a.m. respectively.

At the meetings, members and creditors will discuss and if
thought fit approve the appointment of liquidators and members
of the Committee of Inspection.

Contact: Jacky CW Muk
         27th Floor, Alexandra House
         18 Chater Road, Hong Kong


ARCONTECH CORPORATION: Creditors, Contributories to Meet July 4
---------------------------------------------------------------
Contributories and creditors of Arcontech Corporation will
convene for their first meetings to discuss about wind-up
matters.

The meetings will be held on July 4, 2006 at 10:30 a.m. for
contributories and 11:30 a.m. for creditors.

Contact: E.T. O'Connell
         The Official Receiver's Office
         10th Floor, Queensway
         Government Offices
         66 Queensway, Hong Kong


ART'S PUBLISHING: Court Orders Wind-Up of Operations
----------------------------------------------------
The High Court of First Instance in Hong Kong on June 14, 2006,
ordered the wind-up of Art's Publishing Company Ltd.

The wind-up petition was filed before the Court on April 19,
2006.


CHEONG SHING REPAIR: Court to Hear Wind-Up Petition on July 5
-------------------------------------------------------------
A petition to wind up Cheong Shing Repair & Maintenance Ltd will
be heard before the High Court of Hong Kong on July 5, 2006 at
9:30 a.m.

SKK (Hong Kong) Company Ltd filed the petition with the Court on
May 9, 2006.

Contact: Messrs Peter Lau & Co
         Solicitors for the Petitioner
         Suites 1906-07, Two Pacific Place
         88 Queensway, Admiralty
         Hong Kong


CHINA PROFIT: Members' and Creditors' Meetings Set July 17
----------------------------------------------------------
Members and creditors of China Profit Development Ltd will
convene to appoint liquidators and members of the Committee of
Inspection.

The meetings will be held at the Joint and Several Liquidator
Jacky CW Muk's office on July 17, 2006 at 11:30 a.m. and 11:45
a.m. respectively.

Contact: Jacky CW Muk
         27th Floor, Alexandra House
         18 Chater Road, Hong Kong


CITIC PACIFIC: S&P Pares Credit Rating to BB+ from BBB-
-------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on CITIC Pacific Ltd to BB+ from BBB-.  
At the same time, it removed the rating from CreditWatch, where
it had been placed with negative implications on April 7, 2006.  
The outlook is stable.
     
The issue rating on senior unsecured notes issued by CITIC
Pacific Finance (2001) Ltd and guaranteed by CITIC Pacific was
also lowered to BB+ from BBB- and removed from CreditWatch,
where it had been placed with negative implications on April 7,
2006.
     
"Our downgrade reflects a progressive shift in CITIC Pacific's
business focus and expectations of relatively weak credit
protection measures over the next few years," said Standard &
Poor's credit analyst John Bailey.

CITIC Pacific is streamlining its operations to focus on
majority-owned investments in growth markets, such as property
development and specialty steel in China.  While such a focus
could provide a competitive advantage, heavy capital expenditure
requirements and execution risks associated with its new
projects, such as a HKD10 billion-property development in the
Lujiazui district of Shanghai and a magnetite iron ore project
in Australia, increase operating and financial risks for the
company over the short term.
    
In addition, the sale of proven investments, such as Festival
Walk, a shopping center in Hong Kong, and reduced holdings in
the airline business following the sale of its 28.5% stake in
Hong Kong Dragon Airlines Ltd to Cathay Pacific Airways Ltd, may
reduce recurring cash inflows over the next few years.

Cash proceeds of HKD11.6 billion relating to the sale of
Festival Walk and Dragonair are expected to be largely
reinvested in new project over the next few years.  Capital
expenditure requirements for new projects could result in
negative free cash flow through 2008, producing relatively weak
cash flow coverage ratios.  Nevertheless, liquidity remains
satisfactory, as the company's revolving credit facilities are
adequate to fund working capital needs.

Refinancing requirements are limited, with the company planning
to use the proceeds from the Festival Walk and Dragonair sales
to prepay debt maturing in the next two to three years.  CITIC
Pacific also intends to maintain leverage at or near the level
as of end of 2005. Last year the company reported a net profit
of HKD3.99 billion.

                          *     *     *

Based in Hong Kong, CITIC Pacific Ltd
-- http://www.citicpacific.com/-- is engaged in a range of  
businesses in China and Hong Kong, including steel
manufacturing, property development and investment, power
generation, aviation, infrastructure, communications and
distribution. It is 29% indirectly owned by China International
Trust & Investment Corporation.


FORTRESS INTERNATIONAL: Creditors Must Prove Debts by July 24
-------------------------------------------------------------
Liquidator Kwok Yuen Man requires the creditors of Fortress
International Ltd to submit their proofs of debt by July 24,
2006.

Failure to comply with the requirement will exclude a creditor
from participating in any distribution the Company will make.

Contact: Kwok Yuen Man
         34th Floor, The Lee Gardens
         33 Hysan Avenue, Causeway Bay
         Hong Kong


GOLD MOUNTAIN: Members' and Creditors' Meetings Fixed on July 17
----------------------------------------------------------------
Members and creditors of Gold Mountain Enterprise Ltd will
convene on July 17, 2006 at 10:45 a.m. and 11:00 a.m.
respectively.

At the meetings, members and creditors will be asked to nominate
liquidators and members of the Committee of Inspection.

Contact: Jacky CW Muk
         27th Floor, Alexandra House
         18 Chater Road, Hong Kong


GRANDSTAND HOLDINGS: Court to Hear Wind-Up Petition on July 26
--------------------------------------------------------------
Huanan Commercial Bank Ltd, on May 29, 2006, filed before the
High Court of Hong Kong  a petition to wind up Grandstand
Holdings Ltd.

The High Court will hear the application on July 26, 2006, at
9:30 in the morning.

Contact: C.T. Chan & Co
         Solicitors for the Petitioner
         8th Floor, Grand Building
         18 Connaught Road Central
         Hong Kong


KOWATEX LIMITED: To Wind Up Business After Court Order
------------------------------------------------------
Kowatex Ltd was ordered by the High Court of First Instance in
Hong Kong to wind up its business operation on June 14, 2006.

The wind-up petition was submitted before the Court on April 19,
2006.


METALFIELD LIMITED: Liquidators Cease to Act for Company
--------------------------------------------------------
Lo Yip Tong and Lau Kwai Fun ceased to act as joint and several
liquidators of Metalfield Limited on May 4, 2006.


NEW PARADIGM: Faces Wind-Up Proceedings
---------------------------------------
A petition to wind up New Paradigm e-Technolgy Ltd will be heard
before the High Court of Hong Kong on July 5, 2006 at 9:30 a.m.  

The petition was filed through solicitors P.C. Woo & Co before
the Court on March 15, 2006.

Contact: P.C. Woo & Co
         Solicitors for the Petitioner
         Room 1225, Prince's Bldg
         10 Chater Road, Central
         Hong Kong


UNIQUE RAINBOW: Receives Wind-Up Order
--------------------------------------
The High Court of First Instance in Hong Kong ordered the wind-
up of Unique Rainbow Ltd on June 14, 2006.

The wind-up petition was filed before the Court on April 19,
2006.


STIRLING DRAINAGE: Joint and Several Liquidators Step Aside
-----------------------------------------------------------
Lo Yip Tong and Lau Kwai Fun ceased to act as joint and several
liquidators of Best Charm Enterprises Ltd on April 25, 2006.


SUI CHEONG ENGINEERING: Joint Liquidators Cease to Act for Firm
---------------------------------------------------------------
Lo Yip Tong and Lau Kwai Fun had ceased to act as joint and
several liquidators of Sui Cheong Engineering Ltd on May 13,
2006.


* China Banks at Risk as Asian Banking Stabilizes, S&P Says
-----------------------------------------------------------
Banking systems in Asia have achieved a good measure of
stability although China is facing increasing vulnerability from
rapid credit expansion, Standard & Poor's Ratings Services said
on June 27, 2006.

"The situation in Asia reflects the improved financial profiles
of banks across the region," said Standard & Poor's credit
analyst Ritesh Maheshwari, in the commentary titled "Bank
Industry Country Risk: The Asia Picture".

"Healthy macro factors and strong earnings have boosted bank
performance and lifted asset quality in the past few years, and
risk-management practices and regulatory environments generally
have strengthened," Mr. Maheshwari noted.

Nevertheless, Asian banking systems continue to face medium-to-
high economic and industry risks, unexpected shocks, and the
inevitable future cyclical slowdown.

"An economic slowdown would be the litmus test for the banks'
credit-risk-management systems, though it should be noted that
banking systems will face the potential challenges from a
position of strength, given the structural improvements made
since the Asian financial crisis," said Standard & Poor's credit
analyst Ping Chew.

China's increasing vulnerability of the banking system reflects
high economic and industry risk in the sector, despite
improvements in its fundamentals in the past few years, said Mr.
Chew, in a commentary titled  "Rapid Rise In Interest Rates Or
Renminbi Could Stretch China's Embryonic Banking System".

"Although the banks in China are increasingly operating on a
commercial basis, their developing credit and risk management
systems are likely to be severely stretched by rapidly changing
economic conditions and the relatively high gearing of the
corporate sector," said Standard & Poor's credit analyst Ryan
Tsang.

A rapid rise in interest rates or renminbi could further stretch
China's embryonic banking system. Standard & Poor's estimates
that if the Chinese renminbi appreciates by 25% and interest
rate increases by 200 basis points-both rapidly-the corporate
sector's net profit could decrease by about one-third and the
banking sector's NPLs ratio could rise by up to nine percentage
points, should both sectors fail to take any countermeasures to
mitigate risks and losses.


=========
I N D I A
=========

BANGALORE MERCANTILE: Loses License Due to Insolvency
-----------------------------------------------------
After determining the insolvent position of Bangalore Mercantile
Cooperative Bank Limited - Karnataka, the Reserve Bank of India
decided to cancel BMCB's license on June 23, 2006.

The Reserve Bank explained that Bangalore Mercantile needed to
shut down as it has already caused inconvenience to its
depositors after several attempts to revive its operations
failed.

The Registrar of Co-operative Societies, Karnataka, has also
been requested to issue an order for the winding up of the Bank
and to appoint a liquidator.

Bangalore Mercantile was granted a license by the Reserve Bank
on October 8, 1998, to commence banking business.

In response to the complaints lodged by certain members against
Bangalore Mercantile's management, a special scrutiny of its
books of accounts bank was conducted in August 2000.  It was
discovered that the Board of Directors had flouted the norms and
practices that are usually observed while conducting banking
business and had also violated guidelines issued by the Reserve
Bank.

Hence, in public interest and in the interest of the depositors,
the Board of Directors was superseded and an Administrator was
appointed by RCS to take care of Bangalore Mercantile's affairs.

The statutory inspection of the bank, carried out under Section
35 of the Act, with reference to its financial position as on
September 30, 2000, revealed that the bank's financial position
had deteriorated and in order to protect the interest of the
depositors, the bank was placed under directions issued under
Section 35A with effect from the close of business on October 8,
2001.

Bangalore Mercantile's accounts as of September 30, 2000,
indicated that its financial position was unsatisfactory.  
Moreover, the inspection of the bank with reference to its
financial position as of June 30, 2003, revealed further
deterioration in the realizable value of paid-up capital and
reserve was in the negative.

The bank was immediately issued a notice, asking it to show
cause as to why the license granted to it to conduct banking
business should not be cancelled.  But as Bangalore Mercantile
did not have a viable plan of action for revival and the chances
of its revival were remote, the Reserve Bank decided to cancel
the bank's license in the interest of its depositors.

Consequent to the cancellation of its license, Bangalore
Mercantile is prohibited from carrying on "banking business" as
defined in Section 5(b) of the Banking Regulation Act, 1949,
including acceptance and repayment of deposits.

With the cancellation of its license and after commencement of
liquidation proceedings, the process of paying the bank's
depositors will be set in motion.

Contact: Shri R. G. K. Pillai
         General Manager
         Urban Banks Department
         Reserve Bank of India
         10/3/8, Nrupathunga Road
         Bangalore, India 560 001
         Telephone: (080) 22213033
         Fax: (080) 22293668/22210185
         e-mail address: rgkpillai@rbi.org.in


BHARAT PETROLEUM: Plans US$1.7-Billion Refinery Upgrades
--------------------------------------------------------
Bharat Petroleum Corporation Ltd is keen on spending
INR80 billion, or US$1.7 billion, over five years to upgrade its
refineries, The Financial Express reports, citing Reuters.

In addition to the facility upgrades, Bharat Petroleum will
focus on refining for the next two to three years in terms of
operational efficiencies.  Through this, the Company hopes to
sell 5 million tonnes of imported liquefied petroleum gas each
year by 2012, The Express says.

The Troubled Company Reporter - Asia Pacific recounts that
Bharat Petroleum operates a 240,000 barrels per day refinery in
Mumbai.  Another 150,000-bpd refinery in the southern city of
Kochi is run by its subsidiary Kochi Refineries Ltd.

Bharat Petroleum had also begun a phased expansion of the Kochi
refinery by 50,000 bpd and hoped to complete it by late 2009.

According to The Express, Bharat Petroleum targets to import 13
million tonnes of crude in the year to March 2007, mostly in
term deals from the Middle East, for use in both refineries.

                     About Bharat Petroleum

Headquartered in Maharashtra, India, Bharat Petroleum
Corporation Limited -- http://www.bharatpetroleum.com/-- is  
engaged in refining and marketing petroleum, liquefied petroleum
gas and petrochemical products including middle distillates,
light distillate, lubricants, benzene and toluene.  During the
year 2002, the Group introduced Petro Card and SmartFleet Card
and had around 700,000 customers enrolled in 28 cities.  There
are 4,711 retail outlets and 1,729 LPG distributors that operate
in the country.  The plants of the Group are located in Mahul
and Mallet Road in Mumbai and in Budge.

Bharat Petroleum is currently working to reverse its losses
resulting from the Government's mandate to sell kerosene,
liquefied petroleum gas, petrol and diesel way below market
rates.

On September 23, 2005, the Company delisted its shares from the
Madras Stock Exchange Ltd, Calcutta Stock Exchange Association
Ltd and Delhi Stock Exchange Association Ltd.  In November 2005,
Bharat Petroleum's November 2004 profits dissipated and the
Company registered a INR203-crore (US$45.7 million) net loss.  
By the end of the third quarter ending December 31, 2005, the
Company posted a US$231-million net loss.

In January 2006, Bharat Petroleum entered into a merger with
Koichi Refineries Ltd, which shareholders for both companies
accepted.  Even with its expansion moves, Bharat Petroleum has
decided to put aside a US$1.4-million expansion project due to
losses brought about by oil subsidies, as the Company -- and the
entire industry -- suffered huge losses and has difficulty
implementing expansion activities due to the Government's
refusal to allow oil companies to raise fuel prices despite
global crude oil price crossing US$70 a barrel.

On February 20, 2006, the Petroleum Ministry proposed an
increase of INR3 per liter each in petrol and diesel prices and
INR20 per cylinder increase in liquefied petroleum gas price to
save the oil companies from going bankrupt.


BHARTI AIRTEL: Fitch Affirms 'BB+' Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed Bharti Airtel Limited's Long-term
foreign currency Issuer Default Rating at 'BB+'.  The Outlook on
the rating remains Stable.

Bharti's rating reflects its position as one of India's leading
private-sector telecom operators with proven execution abilities
and a pan-national cellular footprint.  The cellular division is
the primary driver of earnings, accounting for around 63% of
consolidated revenues and around 68% of consolidated EBITDA in
FY06.  During the year, Bharti's cellular subscribers grew by
79% -- above industry-average -- to 19.6 million, which
corresponds to a leading market share of c.22%.  The company has
also maintained strong growth in other segments such as fixed-
line, long distance and enterprise services.  During the year,
Bharti rolled out its broadband network in nine new circles,
extending its fixed-line footprint to 15 circles, thus fuelling
fixed subscriber growth of 57% to 1.3m as at March 2006.

India's cellular market is fragmented and intensely competitive,
with around six operators in most circles, and narrow market
share differentials between the top four operators.  Industry
rationalisation gained momentum in 2005; however competition is
expected to intensify during the current stage of consolidation
given the emergence of Hutchison as a credible national
competitor through its acquisition of BPL Mobile, as well as
large investments by Malaysian operators in regional players.
Medium-term cellular growth prospects are promising, with
penetration still low at around 7%, despite per-annum subscriber
growth having exceeded 90% over the past four years.  The
regulatory framework has evolved rapidly; it remains oriented
towards enabling sustainable competition whilst the level of
uncertainty has dissipated in the wake of several landmark
determinations in recent years.  Significant regulatory
determinations over the last twelve to eighteen months include
raising the foreign ownership limit from 49% to 74%, phased
reductions in access-deficit charges, easing of long-distance
licensing norms and the introduction of distance-neutral --
OneIndia -- flat rate tariffs.

Bharti's rating also reflects its strengthening financial
profile, underscored by sustained strong earnings growth and
declining leverage in FY06.  As at FYE06, net adjusted leverage
improved to 1.4x from 1.8x and FFO/net interest expense improved
to 19.9x from 9.8x the previous year.  However, the company
generated negative free cash flow during the year on account of
large capex outlays relating to its cellular and fixed-line
expansions.  Given the high-growth phase of the industry,
Bharti's capex requirements are expected to remain high over the
medium term and are estimated at between INR80.0 billion to
INR90 billion for FY07, to be funded largely through operating
cash flows and the balance through debt.  Fitch anticipates
continued negative free cash generation through to FY07, but
expects that the company will be able to maintain leverage at
current levels.

Bharti's liquidity position is average, but this is mitigated by
good access to the domestic bank and capital markets and rising
operating cash flows.  As at March 2006, the company held cash
reserves and liquid investments of INR6 billion and undrawn
committed facilities of INR18.6 billion against current
maturities of INR21.8 billion and capex creditors of INR27.0bn
due within the year.

The rating Outlook is Stable, reflecting the expectation that
Bharti can sustain its strong growth and market position while
maintaining a sound financial profile.  Notwithstanding
competitive pressures, ongoing industry consolidation and
regulatory developments, the company is expected to be a major
beneficiary of ongoing robust growth.  Going forward,
sustainable positive free cash flow generation and effective
management of competitive pressures could exert upward pressure
on the ratings. Conversely, negative rating pressure would arise
from substantial debt-funded investments or acquisitions.


LML LIMITED: ICRA Downgrades Preference Cap Instrument to LC
------------------------------------------------------------
ICRA has downgraded the rating assigned to the INR1,250-million
preference share capital programme of LML Limited to "LC" from
"LBB" following prolonged disruption of manufacturing operations
subsequent to lockout at its Kanpur factory.

The lockout was declared by the management in March 2006
following labor unrest over compensation.  The revised rating
indicates poor-credit-quality rating assigned by ICRA.  The
rated instrument has limited prospect of recovery.

LML was promoted in 1972 as Lohia Machines Ltd by the Singhania
family to manufacture machinery for the synthetic fibres
industry.  Later, it diversified into production of 100 cc
scooters, in technical collaboration with Piaggio Vespa, of
Italy in 1984.  Piaggio later took up 23.5% equity stake, which
it later divested in favor of the India promoters pursuant to
the settlement reached following certain legal disputes, which
were settled out-of court. Subsequently, the Company entered
into technical collaboration with Daelim Motor Company, South
Korea to set up a small capacity for manufacturing of four
stroke motorcycles.  LML's facilities are located at Kanpur,
Uttar Pradesh and Gurgaon, Haryana.

As of March 31, 2005, LML had capacity to manufacture 0.45
million scooters and 0.18 million motorcycles per annum.  During
the 12 month period ended March 2006, LML reported turnover of
INR3.39 billion and a net loss of INR687 million.

The Company is currently in a restructuring mode -- for the
second time in less than a year -- and is struggling to overcome
working capital problems.  Labor unrest and a lack of working
capital have practically stopped production and dispatches at
its sole Kanpur plant in the past few weeks.


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

DAVOMAS ABADI: Moody's Affirms B2 Secured Bonds Rating
------------------------------------------------------
Moody's Investors Service had, on June 27, 2006, affirmed PT
Davomas Abadi Tbk's stable 'B2' corporate family rating and the
'B2' foreign currency rating of Davomas International Finance
Company Pte Limited's IDR1.13-trillion senior secured notes due
in 2011.  Moody's afffirmed the rating after the Company had
completed its notes issuances and subsequent repayments of its
outstanding debts.

Established in 1990, P.T. Davomas Abadi Tbk was listed on the
Jakarta Stock Exchange in 1994 and is one of the dominant
producers and exporters of cocoa butter and cocoa powder in  
Indonesia.  


PERUSAHAAN GAS: Fitch Assigns BB- Long-Term Currency IDR
--------------------------------------------------------
Fitch Ratings Agency assigned these ratings to PT Perusahaan Gas
Negara Tbk on June 27, 2006:

   -- Long-term foreign currency Issuer Default Rating 'BB-';

   -- Long-term local currency IDR 'BB-';

   -- PGN Euro Finance 2003 Limited's IDR1.12-trillion notes due
      2014 and IDR1.35-trillion notes due 2013 guaranteed by PGN
      and its subsidiaries 'BB-'; and

   -- National Long-term rating 'AA(idn)'.

As the Indonesian government is the majority shareholder and has
demonstrated ongoing support to PGN, Fitch believes that PGN's
ratings are inherently linked to that of the Republic of
Indonesia, which is 'BB-'.  PGN's ratings benefit from its
dominant position in gas distribution and transmission within
Indonesia.  In its gas distribution business, PGN buys gas on
long-term contracts at a fixed dollar-denominated price and
sells it to numerous industrial and commercial consumers, under
take-or-pay gas sales agreements -- typically one-to-two year
contracts.

Fitch believes that gas demand in Indonesia will remain strong,
supported by a shift to gas by the user industries due to its
price advantage over crude oil.  Even after the recent gas price
increases, PGN's current gas sales price correlates to a crude
oil price of about US$30 per barrel.  A progressive reduction in
oil subsidies from the Indonesian government has eliminated the
historical price distortion which led to limited growth in
domestic gas consumption in the last five years.

PGN's gas transmission business is managed by its 60%-owned
subsidiary Transportasi Gas Indonesia, which owns and operates
two transmission pipelines.  TGI has exceptionally strong
counter-parties and it earns a predetermined transmission
commission on the gas carried.  PGN's ratings are further
supported by nearly 80% of its earnings being derived under
dollar-denominated contracts, which mitigate the risks of its
U.S. dollar foreign currency borrowings.  PGN enjoys low-cost
borrowings obtained as part of bilateral assistance to Indonesia
and from multilateral agencies.  The Company's borrowings have a
long maturity profile with only about 15% of its debt due for
repayment in the next five years.

PGN's ratings are constrained by its ongoing substantially debt-
funded expansion plan, which involves laying two pipelines
connecting South Sumatra to West Java at a cost of IDR0.27
trillion.  Project risks are mitigated by PGN securing firm gas
supply contracts, the high demand for gas in the West Java
region, and funding for the project being almost fully tied-up.  
The pipelines are likely to result in PGN more than doubling (by
2008) the gas it currently distributes.  Fitch also expects the
Company to face a high level of competition in constructing new
pipelines in the future, reflected in it being outbid in the
Gresik-Semarang and the Semarang-Cirebon pipeline projects.  
However, PGN's current pipeline network is protected as new
contracts will be awarded by the new oil and gas downstream
regulatory agency, "BPH Migas," only where the existing pipeline
network is fully utilized.

The Stable Outlook reflects Fitch's expectation that the demand
for gas will remain high and PGN will complete the SSWJ project
without significant cost and time overruns.  A sustained
downward movement of crude prices -- to a level near US$30 per
barrel -- leading PGN to reduce gas prices may trigger a
negative rating action.  Any negative rating action on the
sovereign ratings will also result in a similar change to PGN's
ratings.  Conversely, a positive rating action on the sovereign
and an improvement in PGN's credit metrics after completion of
SSWJ, resulting in a sustained net debt/EBITDA ratio of less
than 2x may result in a positive rating action.

PGN has historically maintained a conservative financial profile
and strong credit metrics, reflected in a net debt/EBITDA of
1.1x in 2005.  Fitch expects PGN's credit metrics to deteriorate
in the near term as it completes funding for the SSWJ project.  
However, its increased leverage is likely to be offset by
incremental cash flow generation from SSWJ, moderating the
gearing levels by 2008.

PT Perusahaan Gas Negara, headquartered in Jakarta, Indonesia
and 61% owned by the Government of Indonesia, is engaged in the
transmission and distribution of natural gas in the country,
with leading domestic market shares.

The Troubled Company Reporter - Asia Pacific reported on May 23,
2006, that Moody's Investors Service had affirmed PGN's Ba2
corporate family rating, which is expected to remain unchanged.


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

NOMURA CAPITAL: S&P Assigns BB Rating to Class D Certificate
------------------------------------------------------------
Standard & Poor's Ratings Services had on June 27, 2006,
assigned its preliminary ratings to NCI Trust Certificate-2's
JPY30.75-billion trust certificates classes A to D due 2013.  
The trust certificates are ultimately secured by seven non-
recourse loans originated by Nomura Capital Investment Co. Ltd.
and extended to seven borrowers, and by one secured specified
bond originated by Nomura Securities Co. Ltd.  The non-recourse
loans and the specified bond are ultimately secured by 22 real
estate properties, and the transaction is arranged by Nomura
Securities Co. Ltd.

The preliminary ratings address the full and timely payment of
interest and the ultimate repayment of principal by the
transaction's legal final maturity date in 2013 for the class A
certificates, and the full payment of interest and ultimate
repayment of principal by the legal maturity date for the class
B to D certificates.  The preliminary rating is based on
information as of June 27, 2006; subsequent information may
result in the assignment of a final rating that differs from the
preliminary rating.

The final rating will be assigned after a full rating analysis
has been concluded, including a satisfactory review of the
collateral, cash flow modeling, transaction structure,
transaction documents, and necessary legal opinions.
     
The preliminary ratings are based on:

   -- The quality of the nonrecourse loans and secured specified
      bond that ultimately secure the trust certificates;

   -- The quality of the real estate properties that ultimately
      secure the nonrecourse loans and secured specified bond;

   -- Ample credit support provided by the senior/subordinate
      structure of the certificates;

   -- Ample liquidity support provided by a cash reserve and a
      servicer advance; and

   -- The sound nature of the transaction's legal structure.

Preliminary ratings assigned:

     JPY30.7535-billion trust certificates due 2013

     Class            Amount              Rating

      A           JPY22.8 billion           AAA
      B            JPY4.2 billion             A
      C            JPY2.3 billion           BBB
      D           JPY1.45 billion            BB
     


SOMPO JAPAN: Punishes 584 Officers for Failure to Pay Claims
------------------------------------------------------------
Sompo Japan Insurance, Inc., has reprimanded 584 officials
following a business suspension order from the Financial
Services Agency after it discovered that the Company had failed
to make payments on insurance claims, Crisscross News reports.

The Company said it had imposed a 30% reduction in Sompo
President Masatoshi Sato's compensation for a six-month period,
while 25 board members and five auditors will be taking a pay
cut as well.

As reported by the Troubled Company Reporter - Asia Pacific on
May 29, 2006, the FSA had ordered a partial business suspension
of Sompo Japan's services after unheeded warnings in August 2002
and November 2005 to adjust its operations and make legitimate
insurance claim payments.  The agency ordered Sompo to suspend
its businesses nationwide for one month starting June 2, 2006.  
The Company is also prohibited from setting up office outside
Japan and will not secure licenses to sell new insurance
products for three months.

According to the TCR-AP report, the FSA discovered that Sompo
Japan did not distribute legitimate payouts in 1,128 cases
totaling JPY120 million, while employees pretended to sell
insurance policies by paying the premiums themselves in order to
meet an aggressive sales target.  The Company admitted it had
rejected 27,273 claims amounting to JPY900 million.

The Mainichi Daily states that in a business improvement plan
submitted to the FSA, Sompo Japan proposed the pay cuts for its
top officials, and it would also establish a compliance
committee that would create steps to prevent further
malpractice, according to informed sources.

                          *     *     *

Sompo Japan Insurance, Inc. --
http://www.sompo-japan.co.jp/english/-- was formed from the  
merger of The Yasuda Fire and Marine Insurance Company with
Nissan Fire & Marine Insurance Co. Limited, in July 2002.  The
Company provides non-life insurances including voluntary
automobile insurance, fire insurance, marine insurance, personal
accident insurance and compulsory automobile liability
insurance, as well as life insurance through its stake in former
CIGNA subsidiary Sompo Japan Himawari Life.  It also provides
reinsurance, asset management, and venture capital.


=========
K O R E A
=========

DAEWOO SHIPBUILDING: Romanian Unit Snags US$280-Million Deal
------------------------------------------------------------
Daewoo Shipbuilding and Marine Engineering Co. said that its
shipyard in Romania has secured US$280 million worth of new
orders to build four container ships for two German clients, AFX
News Limited reports.

Under the deals, Daewoo Mangalia Heavy Industries, Daewoo
Shipbuilding's Romanian unit, will build two Panamax carriers
for Gebab Holding and another two for Conti Holding by October
2009.

The Mangalia shipyard was acquired by Daewoo Shipbuilding in
1997 and turned around into profitability in 2000.

              About Daewoo Shipbuilding and Marine

Headquartered in Seoul, South Korea, Daewoo Shipbuilding and  
Marine Engineering Co. -- http://www.dsme.co.kr/-- has   
developed into one of the world's premium specialized
shipbuilding and offshore contractor that builds various
vessels, offshore platforms, drilling rigs, floating oil
production units, submarines, and destroyers.  The shipbuilder
has been under a creditors-led corporate restructuring program
since 1999 along with some other affiliates after its parent,
Daewoo Group, collapsed under heavy debt exposure.  Daewoo
Shipbuilding is up for sale and the Korea Development Bank and
Korea Asset Management Corporation plan to start the sale
process of their remaining stakes in the second half of 2006.  

An earlier report of the Troubled Company Reporter - Asia
Pacific on May 16, 2006 related that Daewoo Shipbuilding posted
a net loss of KRW45 billion -- US$47.7 million -- for the first
quarter ended March 31, 2006, as compared to the KRW31.4 billion
net loss for the corresponding period in 2005.  The company
blames the result on low ship prices.


HYNIX SEMICONDUCTOR: Shares Sale Priced at US$1.5 Billion
---------------------------------------------------------
Hynix Semiconductor Inc. and its creditors raised US$1.5 billion
by pricing its stake at a smaller-than-expected discount,
Reuters reports, citing sources familiar with the sale.

Rafael Nam of Reuters says that the Company and its creditors
priced a total of about 54 million shares -- 11 million of which
are new shares, while the rest are owned by creditors -- at
KRW26,500 each, a 2.2% discount to Friday's close, compared with
an expected 5-9% discount.

Hynix earned US$1.9 billion from the stake sale in October 2005,
which carried a 7.9% discount for the share price.

The Troubled Company Reporter - Asia Pacific reported on
June 22, 2006, that Hynix and its creditors planned to sell as
much as US$2.7 billion worth of shares and bonds after a
sevenfold jump in the stock in the past three years.

Hynix was set to raise US$700 million by selling new shares and
convertible bonds.  The plan for convertible bonds has been
scrapped due to plummeting Hynix shares.

                   About Hynix Semiconductor

Headquartered in Ichon, South Korea, Hynix Semiconductor Inc. --
http://www.hynix.com/-- is a semiconductor manufacturer.   
Through a merger with LG Semiconductor in 1999, Hynix
Semiconductor now has the world's largest dynamic random access
memory chip production capacity as well as the industry's best
technical development capacity by fully exploiting synergies
resulting from the historical integration of both companies.

In October 2001, the Company was placed under joint management
by the members of the Creditor Financial Institutions' Council
and since then, the Company has been working towards improving
its financial condition through debt restructuring and execution
of various self-rescue plans such as disposals of business
divisions, business work-out and achievement of a KRW1.70-
trillion net income in 2004.

Hynix was rescued from debt in December 2002 through a KRW3.25-
trillion bailout by bank creditors.

The Creditor Council terminated the joint management earlier
than the original date after the Company raised external funds
in an aggregate amount of US$1.80 billion in July 2005.

In July 2005, Moody's Investor Service affirmed its B1 senior
unsecured rating for Hynix Semiconductor's US$500 million bonds
upon its successful closing.  At the same time, Moody's has
affirmed its Ba3 corporate family rating for Hynix, removing
both ratings from provisional status.


HYNIX SEMICONDUCTOR: Sets Sale Format with Lead Creditor KEB
------------------------------------------------------------
Hynix Semiconductor Inc. and its creditors, led by the Korea
Exchange Bank, agreed on the sale details pertaining to the
40 million shares in the chipmaker valued at about
KRW1.45 trillion, The Korea Times reports.

Under the agreement, 27 million shares will be sold to local
institutions, while the remaining 13 million will go to foreign
investors in the form of depository receipts.  The shares will
be sold in blocs.

Korea Times relates that, including the issue of new shares, as
many as 54 million shares are expected to be sold.

The Troubled Company Reporter - Asia Pacific reported on
June 22, 2006, that Hynix and its creditors planned to sell as
much as US$2.7 billion of shares and bonds starting June 2006
after a sevenfold jump in the stock in the past three years.
Hynix was set to raise US$700 million by selling new shares and
convertible bonds.  The plan for convertible bonds has been
scrapped due to plummeting Hynix shares.

A report by Reuters stated that Hynix and its creditors raised
US$1.5 billion by pricing its stake sale at KRW26,500 each.

                   About Hynix Semiconductor

Headquartered in Ichon, South Korea, Hynix Semiconductor Inc. --
http://www.hynix.com/-- is a semiconductor manufacturer.   
Through a merger with LG Semiconductor in 1999, Hynix
Semiconductor now has the world's largest dynamic random access
memory chip production capacity as well as the industry's best
technical development capacity by fully exploiting synergies
resulting from the historical integration of both companies.

In October 2001, the Company was placed under joint management
by the members of the Creditor Financial Institutions' Council
and since then, the Company has been working towards improving
its financial condition through debt restructuring and execution
of various self-rescue plans such as disposals of business
divisions, business work-out and achievement of a KRW1.70-
trillion net income in 2004.

Hynix was rescued from debt in December 2002 through a KRW3.25-
trillion bailout by bank creditors.

The Creditor Council terminated the joint management earlier
than the original date after the Company raised external funds
in an aggregate amount of US$1.80 billion in July 2005.

In July 2005, Moody's Investor Service affirmed its B1 senior
unsecured rating for Hynix Semiconductor's US$500 million bonds
upon its successful closing.  At the same time, Moody's has
affirmed its Ba3 corporate family rating for Hynix, removing
both ratings from provisional status.


HYNIX SEMICONDUCTOR: Japan's MOF Supports Countervailing Duties
---------------------------------------------------------------
As reported in the Troubled Company Reporter - Asia Pacific on
June 22, 2006, the World Trade Organization has set up an
arbitration panel to resolve South Korea's trade dispute with
Japan over punitive tariffs levied on imports of computer memory
chips made by Hynix Semiconductor Inc.  The South Korean
Government plans to "aggressively claim" the unfairness of the
Japanese Government's measure to impose countervailing tariffs
on Hynix chips.

The Mainichi Daily News relates that Japan's Ministry of Finance
issued a report that called on the Japanese Government to impose
without hesitation countervailing duties on subsidized imports
sold at less than fair value.

The MOF Report, compiled by a panel of customs law experts, said
that the Japanese Government should change its policy because
rules to settle international trade disputes have been
established and major economies have introduced special duties.  
Japan has regarded countervailing duties as a measure of last
resort and rarely applied them.

The TCR-AP report stated that on January 27, 2006, Japan levied
punitive tariffs of 27.2% on dynamic random access memory chips
made by Hynix, accusing the chipmaker of violating WTO rules on
government subsidies.

South Korea insisted that the decision breached WTO rules and
accused Japan of levying the retaliation tariffs based on
unilateral claims by Japanese chipmakers.

                     Other Countervailing Woes

In 2003, the United States Department of Commerce and the United
States International Trade Commission, as well as the European
Commission, had determined that the United States and the EU
DRAM manufacturers had suffered damages from the Company's debt
restructuring, and imposed approximately 44% and 35%
countervailing duties on imports of DRAM manufactured in Korea
into the United States and the EU territory, respectively.  In
September 2005, the DOC made the first preliminary annual review
that the countervailing duties should be imposed at the rate of
60.7%.

                   About Hynix Semiconductor

Headquartered in Ichon, South Korea, Hynix Semiconductor Inc. --
http://www.hynix.com/-- is a semiconductor manufacturer.   
Through a merger with LG Semiconductor in 1999, Hynix
Semiconductor now has the world's largest dynamic random access
memory chip production capacity as well as the industry's best
technical development capacity by fully exploiting synergies
resulting from the historical integration of both companies.

In October 2001, the Company was placed under joint management
by the members of the Creditor Financial Institutions' Council
and since then, the Company has been working towards improving
its financial condition through debt restructuring and execution
of various self-rescue plans such as disposals of business
divisions, business work-out and achievement of a KRW1.70-
trillion net income in 2004.

Hynix was rescued from debt in December 2002 through a KRW3.25-
trillion bailout by bank creditors.

The Creditor Council terminated the joint management earlier
than the original date after the Company raised external funds
in an aggregate amount of US$1.80 billion in July 2005.

In July 2005, Moody's Investor Service affirmed its B1 senior
unsecured rating for Hynix Semiconductor's US$500 million bonds
upon its successful closing.  At the same time, Moody's has
affirmed its Ba3 corporate family rating for Hynix, removing
both ratings from provisional status.


HYUNDAI MOTOR: Chairman's Imprisonment Concerns Chinese Dealers
---------------------------------------------------------------
The arrest of Hyundai Motor Group Chairman Chung Mong-koo raises
uncertainty among the Company's representatives, including those
in China, about their and the carmaker's future, The Korea Times
reports.

Beijing Hyundai Sales Branch CEO Zhu Ling Jun, in an interview
with Korea Times, raised the possibility of transferring control
of Hyundai Motor to overseas investors.  Mr. Zhu said that the
Hyundai Motor scandal has been decided on "political
maneuvering," and not on corporate ethical breaches.

As reported in the Troubled Company Reporter - Asia Pacific on
May 17, 2006, Chairman Chung was arrested and indicted on
charges of embezzlement and breach of trust.  He was suspected
of embezzling about US$106 million since 2002 to create a slush
fund, as well as of incurring about US$320 million in damages to
the group.

Chairman Chung subsequently sent an apology letter to Judge Kim
Dong-oh of the Seoul Central District Court, Criminal Division,
who is overseeing the case.  He admitted "overall
responsibility" in the slush funds.  

"It is really regrettable the Korean prosecution has dealt
harshly with few of the leading conglomerates of the country,"
Mr. Zhu said.  "Tough probes will downgrade the national image."

Mr. Zhu also said that Chairman Chung's jail term has caused the
delay in the construction of the second Beijing Hyundai plant.  
The second plant would have provided over 600,000 made-in-China
vehicles to the Chinese market when it begins operating.  

The plan to increase the number of dealerships from 300 to 500
across China is also on hold.

An earlier Troubled Company Reporter - Asia Pacific report had
said that Chairman Chung's arrest has resulted in the Group's
losing focus on major projects, ranging from corporate plans,
investment treaties, supplier contracts and even the Company's
involvement in the World Cup.

Just recently, Hyundai Motor's union voted to hold a partial
four-day strike over wage increases, due partly to management
not being able to negotiate with the union due to Chairman
Chung's incarceration.

Around 80% the 43,890-member union -- seeking a 9.1% pay and
incentives hike, among other requests -- voted in favor of the
plan to stop work for two to four hours every day.

Chairman Chung has been in prison since April 28, 2006, after a
month-long probe, and has been held in a detention center near
Seoul.  His legal counsel have requested that Judge Kim grant
bail for the chief executive, citing his age, his deteriorating
health and the disruption in operations at Hyundai Motor.  The
court has yet to accept the bail request.

                      About Hyundai Motor

Headquartered in Seoul, South Korea, Hyundai Motor Company --
http://www.hyundai-motor.com/-- has been selling cars in the   
United States since 1986, but it only started selling its heavy
trucks stateside in 1998.  Hyundai produces 14 models of cars
and minivans, as well as trucks, buses, and other commercial
vehicles.  The Company reestablished itself as Korea's leading
carmaker in 1998 by acquiring a 51% stake in Kia Motors -- since
reduced to about 45%.  The Company also manufactures machine
tools for factory automation and material- handling equipment.

The Troubled Company Reporter - Asia Pacific reported that the
Hyundai Automotive Group is facing its deepest crisis since
chairman Chung Mong-koo took over in 1999, with problems like
the falling United States dollar, high oil prices and union
demands aggravated by a sweeping criminal investigation
regarding the carmaker's alleged creation of slush funds that
were used by at least two lobbyists to bribe government
officials for business favors, including having KRW55 billion of
Hyundai's bad debts written off.

Chairman Chung has been indicted early in May 2006 for fraud
charges.

Some of the group's official business has been on hold since the
probe on the slush fund started and several top executives were
summoned for questioning.


LG CARD: FSS Says No to Stake Sale & Decides on Public Tender
-------------------------------------------------------------
South Korea's Financial Supervisory Service ruled on June 22,
2006, that LG Card Co. Ltd. should be sold through a public
tender instead of a stake sale, Reuters reports.

As reported in the Troubled Company Reporter - Asia Pacific on
June 15, 2006, state-run Korea Development Bank -- LG Card's
largest shareholder with a 23% stake -- requested the FSS to
review the bidding procedure of LG Card after receiving
complaints from potential bidders.  FSS was then given the power
to decide whether the creditors of the credit card issuer should
suspend their sale plan and opt for a tender offer method.

KDB, which was managing the sale, had been offering a due
diligence report to potential bidders on behalf of other
creditors for the sale of their controlling stake at LG Card.
Supposedly, a winning bidder for LG Card is obliged to buy
stocks held by minority shareholders as it is an open tender,
but KDB failed to give notice about this to potential bidders in
advance.

According to Reuters, 14 creditors, who hold 82% of LG Card,
plan to sell a stake of between 51% and 72% of the Company and
have already drawn initial bids.  The stake is valued at up to
KRW3.8 trillion at market prices.

Reuters notes that the creditors had sought to be exempted from
a public sale by treating LG Card as a company in restructuring,
because they were concerned a public sale may result in a lower
price than a stake sale, as well as delays in the process.

According to the Korean security trading regulations, if more
than 10 shareholders sell shares in a company outside the market
within six months, it should be a tender offer.  A tender offer
is a takeover bid in the form of a public invitation to
shareholders to sell their stock, generally at a price above the
market price.

In its June 22 ruling, the financial watchdog had said that the
Company is not exempted from a public sale.

Yet, Reuters cites a KDB spokesperson as saying that creditors
can still look into an option to reduce the number of
stakeholders to avoid a public sale, but persuading some of them
to unload their stakes in the market could be a complicated
process.

                   Outlook for LG Card Unclear

In a later update, The Korea Times relates that creditors are
likely to weigh two most likely scenarios to push ahead with the
LG Card sale.

One is to reduce the number of creditors below 10 by letting
creditors with a small number of shares sell them in the market.
However, The Times says that this option is not likely because
no major shareholder wants to dispose of its stake now with LG
Card share prices expected to rise during merger talks.

The other option is to select a preferred bidder on condition
that the buyer purchases all shares held by minority
shareholders.  In this case, buyers would face much higher costs
than expected because they should buy stakes from minority
shareholders.

A KDB official told The Times that LG Card creditors will meet
again within the week "to find a solution to the sale."

                        About LG Card Co.

Headquartered in Seoul Korea, LG Card Co. --
http://www.lgcard.com/-- provides installment finance services  
and credit card, as well as leasing services to credit worthy
companies while acquiring valuable assets from merchant banks
and leasing firms.  LG Card also finances families wishing to
purchase big ticket items such as automobiles, appliances and
computers.  At the end of October 2003, LG Card had KRW3.24
trillion more debt than assets and had faced threats of
liquidity crisis and court receivership.  LG Card has been in
the hands of creditors since it was rescued from bankruptcy
through a KRW5 trillion (US$4.78 billion) debt-for-equity swap
and a further KRW1 trillion bailout in late 2004.  Creditors are
hoping to recover the bailout amount through a sale of the
credit card issuer.

LG Card made a recovery last year after posting a net profit of
KRW1.36 trillion.

As reported by the TCR-AP in March 2006, LG Card's shareholders
-- including Korea Development Bank, who holds 22.9% of LG Card  
-- will be selling between 51% and 72% stake in the Company.  
The sale is expected to generate around KRW6 trillion.

LG Card creditors, including Kookmin Bank and the Woori Bank
unit of Woori Finance Holdings Co., are hoping that the sale
will succeed so they could recover around KRW5 trillion spent in
bailing out LG Card in 2004 after its brush with bankruptcy.


LG CARD: Posts KRW353.6-Billion First Quarter Net Income
--------------------------------------------------------
LG Card Co. Ltd. posted a KRW353.6-billion net income for the
first quarter of 2006, up from the KRW291.8 billion in the first
quarter of 2005, a press release from Korea's Financial
Supervisory Commission reveals.

LG Card's first quarter 2006 net income is also higher than the
KRW228.1-billion net income posted by the Company for the fourth
quarter of 2005.  LG Card's net income for the year 2005
amounted to KRW1.36 trillion.

The FSC report also said that LG Card's delinquency ratio for
the first quarter of 2006 was at 6.50%, higher than the industry
average of 4.96%, but the best ratio for LG Card in the last
five quarters.  LG Card's delinquency ratio was at 7.89% in the
fourth quarter of 2005, and at 11.15% in the first quarter of
2005.

Delinquency ratio is defined as payments overdue one month or
more plus loans converted from overdue credit card receivables,
divided by total managed assets.

The Company's capital adequacy ratio also increased 1.42%
quarter to quarter to 26.97% at the end of the three-month
period ended March 31, 2006.  It was pegged at 16.22% in the
first quarter of 2005.

The FSC report contains this information for LG Card:

                                  2005                 2006
                      ----------------------------     ----
                       1Q      2Q      3Q      4Q       1Q
                      ----    ----    ----    ----     ----
   Net Income
   (KRW, billions)   291.8   479.8   363.4   228.1    353.6

   Delinquency
   Ratios             11.2%    9.7%    9.2%    7.9%     6.5%

   Adjusted Capital
   Adequacy Ratio     16.2%   22.0%   25.3%   25.6%    27.0%


                        About LG Card Co.

Headquartered in Seoul, South Korea, LG Card Co. --
http://www.lgcard.com/-- provides installment finance services   
and credit card, as well as leasing services to credit worthy
companies while acquiring valuable assets from merchant banks
and leasing firms.  LG Card also finances families wishing to
purchase big ticket items such as automobiles, appliances and
computers.  At the end of October 2003, LG Card had KRW3.24
trillion more debt than assets and had faced threats of
liquidity crisis and court receivership.  LG Card has been in
the hands of creditors since it was rescued from bankruptcy
through a KRW5 trillion (US$4.78 billion) debt-for-equity swap
and a further KRW1 trillion bailout in late 2004.  Creditors are
hoping to recover the bailout amount through a sale of the
credit card issuer.


SHINHAN BANK: Is Part of the FTC Anti-Cartel Probe
--------------------------------------------------
Shinhan Bank underwent a one-day inspection by South Korea's
Fair Trade Commission to examine its recent interest rates and
fees, Market Watch reports.

The report cited newspapers, including Maeil Business Newspaper
and the Financial Times.  Industry sources relate that nine
other banks in the county, including Kookmin Bank, Woori Bank,
Hana Bank and the Korean units of Citibank and Standard
Chartered PLC were also visited by anti-trust officials.

                          Cartel Probe

The Korean Times reports that, according to FTC Chairman Kwon
Oh-seung, the anti-trust body will soon unveil the outcome of
its investigation into what it claims are anti-competition
activities by 10 banks in setting banking service fees and
interest rates on loans and deposits.

The anti-cartel probe is a part of the body's wide-ranging
investigation into the banks' lending practices and financial
transactions between their subsidiaries.  Beginning early June
2006, FTC investigators have been quizzing bank officials to
check how they decide on banking fees and interest rates.

The FTC is expected to impose heavy fines on some banks that led
the alleged cartel.  Kookmin Bank was earlier fined
KRW6.3 billion for taking billions of inappropriate interest
gains and for illegal inter-subsidiary dealings.  The FTC also
levied a fine of KRW560 million on Citibank Korea on similar
violations, and ordered Shinhan Bank to stop suspicious inter-
subsidiary dealings.

                       About Shinhan Bank

Headquartered in Taepyeong-no, Seoul, Shinhan Bank --
http://www.shinhan.com-- was established in 1982 with capital  
from Korean residents in Japan.  It is Korea's fourth largest
bank by assets -- second largest after merging with Chohung Bank
-- holding a 9% share of deposits and 11% of loans.  The bank
has developed a strong franchise in the consumer as well as
small and medium-sized enterprise segments.  In September 2001,
it formed a holding company, SFG, under which it and five other
affiliates became stable companies.  Since then, the Shinhan
Financial Group has expanded its organizational structure to
include 11 subsidiaries and is now Korea's second largest
financial group.

Its merger with Chohung Bank was finalized in April 2006.

The Troubled Company Reporter - Asia Pacific reported on March
16, 2006, that Moody's Investors Service has raised Shinhan
Bank's bank financial strength rating to D+ from D.  The revised
rating carries a stable outlook.  The higher BFSR reflects the
bank's sustained financial fundamentals upon its merger with
affiliate Chohung Bank.

Despite Moody's initial concerns, Chohung Bank's credit-
worthiness under its parent, Shinhan Financial Group, has
improved substantially.  Therefore, the absorption of Chohung
Bank into Shinhan Bank will not dilute the financial health of
the combined bank as greatly anticipated at the time of the
acquisition.  Nonetheless, the financial fundamentals place
Shinhan Bank at the low end of the rating band.


SHINHAN BANK: May Enter Restructuring This Year
-----------------------------------------------
Shinhan Bank's president, Shin Sang-hoon, has hinted that the
bank may begin restructuring later this year, saying that
Shinhan is showing weaker-than-expected results after its merger
with Chohung Bank, The Korean Times reports.

"I regret to say that, after the merger, important earnings
indicators didn't improve and remain lower than expected," The
Mr. Shin said in a message to employees. "We are facing growing
competition with rival banks and an uncertain market situation.
But they can't be the reason for the poor performance."

Mr. Shin urged employees to make more efforts to contribute to
the successful integration of the two banks.  He also noted that
the merged bank is divided into many groups from different
backgrounds, and it is hindering the smooth integration of the
two banks.

The Korean Times further relates that Mr. Shin's remarks are
viewed as an indication to introduce post-merger restructuring
programs, if the bank fails to achieve stronger earnings in the
following months.

Shinhan Bank posted a KRW228.1 billion in net profit for the
January-March period, up 34.3% from the previous quarter.
Chohung Bank's net profit also rose 60% from the first quarter
of 2005, to KRW200.9 billion in the first quarter of 2006, but
is 8.5% lower from KRW219.5 billion the previous quarter.

                       About Shinhan Bank

Headquartered in Taepyeong-no, Seoul, Shinhan Bank --
http://www.shinhan.com-- was established in 1982 with capital  
from Korean residents in Japan.  It is Korea's fourth largest
bank by assets -- second largest after merging with Chohung Bank
-- holding a 9% share of deposits and 11% of loans.  The bank
has developed a strong franchise in the consumer as well as
small and medium-sized enterprise segments.  In September 2001,
it formed a holding company, SFG, under which it and five other
affiliates became stable companies.  Since then, the Shinhan
Financial Group has expanded its organizational structure to
include 11 subsidiaries and is now Korea's second largest
financial group.

Its merger with Chohung Bank was finalized in April 2006.

The Troubled Company Reporter - Asia Pacific reported on March
16, 2006, that Moody's Investors Service has raised Shinhan
Bank's bank financial strength rating to D+ from D.  The revised
rating carries a stable outlook.  The higher BFSR reflects the
bank's sustained financial fundamentals upon its merger with
affiliate Chohung Bank.

Despite Moody's initial concerns, Chohung Bank's credit-
worthiness under its parent, Shinhan Financial Group, has
improved substantially.  Therefore, the absorption of Chohung
Bank into Shinhan Bank will not dilute the financial health of
the combined bank as greatly anticipated at the time of the
acquisition.  Nonetheless, the financial fundamentals place
Shinhan Bank at the low end of the rating band.


SSANGYONG MOTOR: Posts KRW22.2-Bil Rise in 1st Quarter Net Loss
---------------------------------------------------------------
Ssangyong Motor Co. posted a net loss of KRW23.3 billion for the
first quarter of 2006, compared with a loss of KRW1.1 billion in
the first quarter last year.

During the period, Ssangyong Motor also posted an operating loss
of KRW25.2 billion, compared with a profit of KRW2.4 billion the
previous year.

Sales fell 4% to KRW729 billion, as only 30,584 cars were sold
in the period, down 2.8% from a year earlier.  

                        Early Retirement

According to Yonhap News, Shanghai Automotive Industry Corp. --
the major shareholder of Ssangyong Motor -- confirmed that it
will cut the workforce of the South Korean automaker through an
early retirement program as part of a measure to further cut
expenses.

"The labor union of Ssangyong Motor should share the agony in
the short term," Philip Murtaugh, vice president of Shanghai
Automotive told Korean reporters.

Mr. Murtaugh said that before proceeding with the early
retirement package, Shanghai Automotive will first seek the
union's support.


Headquartered in Kyonggi, South Korea, Ssangyong Motor Company
Ltd. -- http://www.smotor.com/-- manufactures and assembles    
motor vehicle bodies on purchased basis such as jeep style cars
under the brand names of 'Korando' and 'Musso', minibuses under
the brand name of 'Istana', special purpose cars including
cement mixers, trailers, fire-trucks as well as auto parts.  The
Company implemented a five-year debt workout program in 1999
after Ssangyong was separated from Daewoo Group which was
dissolved under huge debt.

Shanghai Automotive Industry Corp. took over Ssangyong,
triggering fallen sales and labor unrest.


* KCC to Investigate 3 Wireless Operators for Illegal Behavior
--------------------------------------------------------------
Three South Korean wireless operators are suspected of possible
illegal behavior through overspending on subsidies for new cell
phone buyers after the country changed subsidy rules for cell
phones in late March 2006, The Korea Times reports.

According to Korea Times, SK Telecom, KTF and LG Telecom are
estimated to have spent roughly KRW200 billion a month to
subsidize new purchasers after some subsidies were allowed three
months ago.  After a three-year embargo on mobile phone
subsidies, the Government partially legalized them on March 27,
2006, in accordance with preset rates that are reported to the
Government.

However, it appears that carriers may have violated those rates
given the size of their reported spending.

The Korea Communications Commission plans to investigate the
overspending and will penalize any illegalities, or in extreme
cases, suspend the firms' business activities.


* Korean Builders Get Record Overseas Construction Orders
---------------------------------------------------------
Korean construction companies are expected to sweep up a record
level of overseas orders due to the swelling construction
business in the Middle East, The Korea Herald reports, citing
local brokerage firm Hanwha Securities Co.

The overseas deals are estimated to be worth up to
US$14 billion.

The Herald says that the combined amount of overseas orders
received by the builders in the first half of 2006 jumped 35.6%
year-on-year, already covering nearly three quarters of last
year's total volume.  More than half of the orders came from the
Middle East, which is projected to become the world's largest
construction market.

"Overseas construction is on the rise again after orders surged
44.8% from 2004 to US$10.86 billion last year, passing the
US$10-billion mark for the first time since the Asian financial
crisis," said Hanwha Securities analyst Jeon Hyun-shik.  "It is
more meaningful because builders now select profitable projects
instead of focusing on the size of orders."

The Korean builders' overseas contracts amount to:

   * Daewoo Engineering & Construction Co.     US$1.32 billion
   * Hyundai Heavy Industries Co.              US$1.24 billion
   * Samsung Engineering Co.                   US$0.91 billion
   * Doosan Heavy Industries Co.               US$0.85 billion
   * Hyundai Engineering & Construction Co.    US$0.64 billion


* Equity and Debt Financing Increases 20.6% in May
--------------------------------------------------
Korean companies issued KRW4.38 trillion worth of bonds and
stocks in May 2006, the Troubled Company Reporter - Asia Pacific
learns from the Financial Supervisory Service.

The result is a 20.6% increase from KRW3.63 trillion in April.  
Yet, in the five-month period from January to May 2006, the
total issuances amounted only to KRW18.78 trillion, down 15.1%
compared to the same five-month period a year ago.

Stock issuances increased 181.5% to KRW428.8 billion while bond
issuances increased 13.5% to KRW3.95 trillion from April to May.

                         Debt Financing

Excluding asset-backed securities and financial bonds, corporate
debt issuances decreased 19% to KRW1.5 trillion in May, the FSS
reveals.

The amount of corporate debt issued for facilities investment
fell 80.8% to KRW2.5 billion while that for operating capital
fell 31.8% to KRW712.5 billion from a month ago.

           Unsecured Corporate Bonds by Credit Rating

There were 21 unsecured corporate bond issuances totaling
KRW1.5 trillion in May, down 14.2% from April 2006.  Unsecured
corporate bonds with BBB credit ratings fell 47% to
KRW395 billion.  Meanwhile, those with BB or lower ratings rose
sharply in May by 707.7% to KRW105.0 billion and accounted for
7.7% of the total, up from 0.7% in the previous month.

The FSS report includes these details on unsecured corporate
bonds:

           Unsecured Corporate Bonds by Credit Rating
                       (In KRW, billions)

                          04/2006    05/2006   % Change
                          -------    -------   --------
         A or higher        990.0    1,000.0        1.0
         BBB                745.0      395.0      -47.0
         BB or lower         13.0      105.0      707.7
         Total            1,748.0    1,500.0      -14.2

                      01-05/2005   01-05/2006   % Change
                      ----------   ----------   --------
        A or higher      6,092.1      3,680.0      -39.6
        BBB              3,443.7      2,909.5      -15.5
        BB or lower         30.0        281.0      836.7
        Total            9,565.8      6,870.5      -28.2


* Fewer But Bigger Mergers in 2005
----------------------------------
Korea experienced fewer corporate mergers in 2005, but the
amount of money involved in such business dealings rose, the
Joongang Daily News reports, citing the Korea's Fair Trade
Commission.

The FTC disclosed that there were a total of 658 mergers and
acquisition deals during 2005, down 12.1% from 2004.  The 749
cases in 2004 was the highest number so far.

The report states that the drop was due to the commission's move
to ease related rules as well as its decision not to include
small deals.

                    Higher Amounts Involved

The FTC, however, notes that the funds involved reached
KRW19.2 trillion, up 18% from KRW16.2 trillion the year before.
The average size of each deal was KRW42.9 billion, up 36% from
2004.

Among the sectors, half of the M&A deals for 2005 were made in
the service sectors, specifically in the financial areas,
distribution, IT and broadcasting.

Only 12.8% of the M&A deals involved foreign-owned companies,
39% of which involved European firms.  Foreign M&As contributed
KRW5.5 trillion into the pot.

The most noteworthy transactions involved Standard Chartered
Bank, Shinhan Bank, Doosan Heavy Industries Co. and Shanghai
Automotive Group.

                       Murkey M&A Market

In a related report, Maeil Business says that frequent
adjustments in sales conditions, rampage of malicious
propagandas, information leaks, labor union protests and many
other problems exposed during the recent sales process of giant
firms are hurting Korea's M&A market.

Furthermore, conflicts of a suspected bubble in acquisition
prices is also being surfaced with the bidding price for Daewoo
Engineering & Construction leaping over KRW6 trillion from the
originally anticipated KRW5 trillion, while the calling price
for LG Card Co. is expected to record over KRW1 trillion.

An official from the industry stated, "A row of massive M&A
cases are waiting behind the Daewoo E&C sale including Hyundai
Engineering & Construction, LG Card and Hynix.  A more
transparent and fair judgment conditions must be rooted down
rather than companies simply trying to withdraw public fund and
improve corporate competitiveness."

Daewoo E&C's sale in particular has been claimed as a typical
case of an M&A in a developing nation.  The confidentiality
agreement, the number one principle in international bidding,
was not properly kept and all bidding prices were disclosed.


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

AYER HITAM: Inks Deal to Vary Joint Venture Agreement Terms
-----------------------------------------------------------
On June 26, 2006, Ayer Hitam Tin Dredging Berhad's wholly owned
subsidiary, Harta AHT Sdn Bhd, entered into a supplemental
agreement to vary the terms of a joint venture agreement it
signed with Pembinaan Karisma Efektif Sdn Bhd.

As reported by the Troubled Company Reporter - Asia Pacific,
Harta AHT, on May 22, 2006, entered into a joint venture
agreement with Pembinaan Karisma wherein the parties have agreed
to jointly develop two prices of freehold land in Negeri Pulau
Pinang, measuring approximately 6.47 acres.

Under the Supplemental Agreement, Pembinaan Karisma has agreed
to allow the charge of the Property to Harta AHT's financier in
consideration to Harta agreeing to obtain the financier's letter
of undertaking and agreeing that the loan for which the charge
is created will be for the sole purpose of carrying out the
development contemplated by the JVA.

The Proposed Variation will give the Ayer Hitam Group additional
flexibility to raise funding required for the development of the
Property under the joint venture agreement.

                        About Ayer Hitam

Headquartered in Kuala Lumpur, Malaysia, Ayer Hitam Tin Dredging
Malaysia Berhad -- http://www.ahtin.com.my/-- is involved in  
property development and the trading of promotional products and
services in Malaysia.  The Company is also engaged in the
trading of uninterrupted power supply equipment and magnetic
fuel treatment systems and the provision of investment holding,
nominee services, hotel development and management and
renovation services.  The Company has been incurring huge losses
in the past years and has defaulted on several loan facilities.  
As of May 31, 2006, Ayer Hitam's payment defaults have reached
MYR40 million.  The Company has presented a restructuring
proposal, which was rejected by the Securities Commission after
determining that the Scheme is not a comprehensive proposal
capable of resolving all the financial issues faced by the
Company.   

The Proposed Restructuring Scheme includes provisions on:

     * capital reduction;
     * amendments to the company's Memorandum of Association;
     * rights issue;
     * private placement;
     * debt settlement; and
     * disposal of Motif Harta Sdn Bhd.


FEDERAL FURNITURE: Unit Inks Sale & Purchase Deal with Malayan
--------------------------------------------------------------
Federal Furniture Holdings Berhad's wholly owned subsidiary,
Federal Furniture Industries Sdn Bhd, signed on June 23, 2006, a
conditional sale and purchase agreement with Malayan Banking
Berhad for the sale of a property at the 15th Floor, Menara Choy
Fook On, for MYR4,950,000.

The disposal of the Property is in fulfillment of one of the
proposed bilateral settlements contemplated under Federal
Furniture Holdings' Proposed Debt Restructuring Scheme that was
unveiled on June 24, 2004, and approved by the Securities
Commission on March 15, 2005.

The total consideration of MYR4,950,00 is arrived at on a
willing-buyer-willing seller basis taking into consideration
that payment will be made by way of set off of certain
indebtedness of the Federal Furniture Group to Malayan Banking
and the waiver of interest by the latter in respect of these
indebtedness from December 31, 2002, until the completion of the
transaction.  The Property is currently charged to Malayan
Banking.

The net book value of the Property as of December 31, 2005,
based on valuation done on December 31, 2002, is MYR5,170,000.  
Based on the audited NBV at December 31, 2005, the sale would
result in a loss of approximately MYR220,000.  However there
will be a write-back of interest waived by Malayan Banking on
the indebtedness set-off that at December 31, 2005,amounted to
approximately MYR380,800.  The net impact of the sale is a gain
of MYR160,800 that will increase the net assets of Federal
Furniture Holdings by 0.60 sen per share.  

Going forward the sale is expected to generate a yearly net gain
in earnings of approximately MYR120,000 taking into account the
interest saving against the loss of rental income.

Meanwhile, the proceeds of the sale will be used to pare down
the borrowings of the Group and reduce interest costs.

The sale is subject to the approval of the shareholders at the
Extraordinary General Meeting for the proposed debt
restructuring scheme that is scheduled to be held on June 30,
2006, and the relevant authorities.  The sale of the Property is
estimated to take approximately six months to complete and does
not depart from the Commission's Policies and Guidelines on
Issues/Offer of Securities.

Federal Furniture Holdings' board of directors believe that the
sale is in the best interest of the Company.

             About Federal Furniture Holdings Berhad

Headquartered in Selangor Darul Ehsan Malaysia Federal Furniture
Holdings Bhd -- http://www.federal-furniture.com/-- is a listed  
company on the Kuala Lumpur Stock Exchange and is Malaysia's
premier furniture and interior design group.  It consists of
companies in all the main sectors of the furniture-related
industries, from manufacturing, marketing, exporting, contract
furnishing and interior design to retail.  On June 24, 2004, the
Board of Directors of Federal Furniture has proposed a capital
reduction, a share premium reduction, rights issue with warrants
and a debt settlement scheme with some of its financial
institution lenders to restructure and settle a substantial part
of its total bank borrowings.  With only two more months prior
to submitting its Restructuring Plan to authorities for
approval, Furniture Holdings Berhad admitted it has not yet
finalized its Financial Regularization Plan.


HARVEST COURT: Unveils 28th AGM Results
---------------------------------------
Harvest Court Industries Berhad held its 28th Annual General
Meeting on June 26, 2006, and passed all ordinary resolutions.

During the meeting, members also resolved that the Company's
director be empowered to issue new shares from time to time
provided that the aggregate number of shares issued does not
exceed 10% of the Company's issued capital for the time being
until the conclusion of the next AGM.

Pursuant to the Listing Requirements of the Bursa Malaysia
Securities Berhad, approval from shareholders has also been
obtained for shareholders' mandate for the Company and its
subsidiaries to enter into recurrent related party transactions
of a revenue or trading nature with related parties the detailed
is as disclosed in the Circular to Shareholders dated June 2,
2006.

              About Harvest Court Industries Berhad

Headquartered in Selangor, Malaysia, Harvest Court Industries
Berhad -- http://www.harvestcourt.com/-- is engaged in kiln  
drying, saw milling and manufacturing of timber doors and
related products. Other activities include development of
residential and commercial properties and jetty services and
provision of construction works and related maintenance
services.  The Group is also involved in the provision of
marketing and management services and investment in shares and
securities.  The Group operates in Malaysia and Australia.  The
Group has defaulted on several loan facilities because of a
reduction in sales from 2002 onwards due to a weak global market
as a result of the Iraqi and the severe acute respiratory
syndrome, or SARS, as well as its inability to raise funds via
the equity market due to weak market sentiment.  Due to its
financial position, Harvest Court had embarked on an exercise to
restructure the Company, including a debt restructuring and
capital reduction.  The Company's proposed corporate exercise
was rejected by the Securities Commission in November 2005, on
grounds that the proposals are not comprehensive and are not
capable of resolving all financial problems of the Company.  Its
appeal to reconsider the rejection was also junked by the
Commission on February 24, 2006.  The Harvest Court Board is now
in talks with lenders and major creditors for its next course of
action.

The Company's March 31, 2006, balance sheet revealed strained
liquidity with MYR18,934,859 in current assets available to pay
MYR51,890,884 of current liabilities coming due within the next
12 months.


MALAYSIA AIRLINES: Members Approve All AGM Resolutions
------------------------------------------------------
All resolutions stated in the Notice of 35th Annual General
Meeting of Malaysia Airline System Berhad dated June 2, 2006,
were duly passed at the Company's AGM held on June 26, 2006.

During the meeting, the Company's members:

   -- received and adopted the Directors' Report and the Audited
      Financial Statements for the financial period ended
      December 31, 2005, together with the Auditors' Report;

   -- approved the Directors' fees for the financial period
      ended December 31, 2005;

   -- re-elected directors

      * Dato' Dr. Mohd Munir bin Abdul Majid;
      * Datuk Amar Haji Abdul Aziz bin Haji Husain;
      * Keong Choon Keat;
      * Martin Gilbert Barrow;
      * Iris Jala; and

   -- reappointed Messrs Ernst & Young as auditors and
      authorized the Directors to fix the auditors'
      remuneration; and

   -- authorized the Company's board of directors to issue
      shares in the Company's capital, provided always that the
      aggregate number of shares to be issued will not exceed
      10% of the issued share capital of the Company and that
      the authority will continue to be in force until the
      conclusion of the Company's next Annual General Meeting.
     
                    About Malaysia Airlines

Headquartered in Selangor, Malaysia, Malaysia Airlines --
http://www.malaysiaairlines.com/-- services domestic and  
international flights.  Its global network comprised 32 domestic
and 86 international destinations.  Of the 86 international
destinations, 17 were operated in collaboration with our airline
partners.

The carrier made a loss after tax of MYR1.3 billion for fiscal
year 2005, and MYR616 million for the nine-month ended Dec. 31,
2005, due to high fuel and operating costs, and unprofitable
routes.  In late February 2006, it unveiled a radical rescue
plan to raise MYR4 billion in order to stay afloat and return to
profitability by 2007.  Under the restructuring plan, the
airline pledged to cut its budget by 20% across the board,
terminate many unprofitable routes, freeze recruitment except
for front-line staff, crack down on corruption by encouraging
Whistle-blowing and stop corporate sponsorship.

Malaysia Airlines posted a pre-tax loss of MYR309.118 million
for the first quarter ended March 31, 2006, as against a pre-tax
profit of MYR112.017 million in the same quarter of 2005.  The
Company's balance sheet as of March 31, 2006, showed strained
liquidity with total current assets of MYR3,328,129,000
available to pay MYR4,913,488,000 in total current liabilities
due in the next 12 months.


MALAYSIA AIRLINES: Considers All Options in A380 Purchase Deal
--------------------------------------------------------------
Malaysia Airlines is looking at every option available on how it
will manage the delay in the delivery of six A380 jumbo jets by
Airbus SAS, Business Times reports.

As reported by the Troubled Company Reporter - Asia Pacific,
Airbus disclosed on June 13, 2006, that its delivery of the A380
aircraft ordered by Malaysia Airlines would be delayed by an
additional six to seven months due to production issues.

The carrier's managing director, Idri Jala, told The Star Online
that Malaysia Airlines had not come up with a final decision
yet.  However, Mr. Jala stressed that the Company is gearing up
for the A380s it had ordered and will continue to negotiate for
the best outcome.

According to Business Times, Mr. Jala was in talks with Airbus
but did not provide details of the discussion, saying
"disclosing too much information at this time may prejudice the
negotiation with Airbus."

Malaysia Airlines' chairman Munir Majid also turned down
questions on rumors that the carrier could be looking at
canceling its A380 order and replace it with an order with
Boeing, Forbes News reveals.

"This is speculation, it will not be appropriate for us to
comment," Mr. Maid told Forbes.

The TCR-AP recounts that the Malaysian Airline System Employees
Union is calling for the airline to drop the Airbus deal.  In
fact, the Union had urged Malaysia Airlines' parent firm,
Penerbangan Malaysia Bhd, to cancel its plans to pursue the
aircraft purchase and instead use the money allocated for it to
boost the carrier's cash flow and on the maintenance of its
existing fleet.

Mr. Jala said that the delay of the A380s delivery would not
affect the Company's business turnaround plan especially on its
hub and spoke concept, Business Times says.

Under the business turnaround plan, Malaysia Airlines would cut
routes to Europe and develop a hub-and-spoke concept for which
the A380s could be the right aircraft to carry more passengers
at one go.  The A380 can seat 555 passengers while the biggest
Malaysia Airline aircraft now can seat only 386, The Star
relates.

Malaysia Airlines was hoping that the A380s, which it ordered
three years ago, will help lower operating cost and thus boost
its revenues.

                    About Malaysia Airlines

Headquartered in Selangor, Malaysia, Malaysia Airlines --
http://www.malaysiaairlines.com/-- services domestic and  
international flights.  Its global network comprised 32 domestic
and 86 international destinations.  Of the 86 international
destinations, 17 were operated in collaboration with our airline
partners.

The carrier made a loss after tax of MYR1.3 billion for fiscal
year 2005, and MYR616 million for the nine-month ended Dec. 31,
2005, due to high fuel and operating costs, and unprofitable
routes.  In late February 2006, it unveiled a radical rescue
plan to raise MYR4 billion in order to stay afloat and return to
profitability by 2007.  Under the restructuring plan, the
airline pledged to cut its budget by 20% across the board,
terminate many unprofitable routes, freeze recruitment except
for front-line staff, crack down on corruption by encouraging
Whistle-blowing and stop corporate sponsorship.

Malaysia Airlines posted a pre-tax loss of MYR309.118 million
for the first quarter ended March 31, 2006, as against a pre-tax
profit of MYR112.017 million in the same quarter of 2005.  The
Company's balance sheet as of March 31, 2006, showed strained
liquidity with total current assets of MYR3,328,129,000
available to pay MYR4,913,488,000 in total current liabilities
due in the next 12 months.


MALAYSIA AIRLINES: Whistleblower Team to Probe 30 Complaints
------------------------------------------------------------
The four-member panel set up under Malaysia Airlines'
whistleblower policy has already received 30 complaints from
employees, The Edge Daily reveals.

The Policy was instituted in February this year as part of the
Company's business turnaround plan to encourage employees to
alert management of malpractices, irregularities and negligence
affecting the national carrier, the report says.

Malaysia Airlines managing director Idris Jala told The Edge
that the Policy received a good response since employees are
assured that the identity of the whistleblower would be kept
confidential.

Mr. Jala disclosed that only senior general managers Mohd Izani
Ashari of the Turnaround Management Office would know of the
whistleblowers' identities.  Upon receiving a complaint,
Mr. Ashari would immediately inform the panel without
identifying the informant.

Malaysia Airlines is optimistic that the Policy will help the
carrier regain the confidence of its employees, investors and
customers, The Edge adds.

                    About Malaysia Airlines

Headquartered in Selangor, Malaysia, Malaysia Airlines --
http://www.malaysiaairlines.com/-- services domestic and  
international flights.  Its global network comprised 32 domestic
and 86 international destinations.  Of the 86 international
destinations, 17 were operated in collaboration with our airline
partners.

The carrier made a loss after tax of MYR1.3 billion for fiscal
year 2005, and MYR616 million for the nine-month ended Dec. 31,
2005, due to high fuel and operating costs, and unprofitable
routes.  In late February 2006, it unveiled a radical rescue
plan to raise MYR4 billion in order to stay afloat and return to
profitability by 2007.  Under the restructuring plan, the
airline pledged to cut its budget by 20% across the board,
terminate many unprofitable routes, freeze recruitment except
for front-line staff, crack down on corruption by encouraging
Whistle-blowing and stop corporate sponsorship.

Malaysia Airlines posted a pre-tax loss of MYR309.118 million
for the first quarter ended March 31, 2006, as against a pre-tax
profit of MYR112.017 million in the same quarter of 2005.  The
Company's balance sheet as of March 31, 2006, showed strained
liquidity with total current assets of MYR3,328,129,000
available to pay MYR4,913,488,000 in total current liabilities
due in the next 12 months.


METROPLEX BERHAD: OCBC Agrees to Extend Indulgence Period
---------------------------------------------------------
OCBC Bank Berhad has agreed to a stay of execution of the
Summary Judgment against Metroplex Berhad until December 9,
2006.

However, OCBC's decision is subject to Metroplex withdrawing its
appeal to the Judge-in-Chambers against the Summary Judgment,
which was granted on March 4, 2002.

In the event Metroplex does apply for a restraining order within
the Indulgence Period, OCBC is to be excluded from that order.

Furthermore, in the event Metroplex is ordered to be wound up
within the Indulgence Period, OCBC is entitled to file a Proof
of Debt and take other steps to preserve its rights and the debt
under the Summary Judgment.

The Summary Judgment refers to Kuala Lumpur High Court ordering
Metroplex Berhad to pay its MYR59,315,450 debt to OCBC Bank
(Malaysia) Berhad.  The debt represents Metroplex's default in
payment of the revolving credit facility and overdraft facility
granted by OCBC to the Company.

                     About Metroplex Berhad

Headquartered in Kuala Lumpur, Malaysia, Metroplex Berhad's
activities are hotel and casino operations.  Other activities
include property investment, property development, provision of
administrative services, general and building construction,
leasing and financing, trading of building materials and
operation of hotel management training school.  Operations are
carried out in Malaysia, Hong Kong and Philippines.  On April
28, 2005, Morgan Stanley Emerging Markets Inc. had filed a
winding-up petition on the Company to the Kuala Lumpur High
Court.  Morgan Stanley also filed for a summons to appoint a
provisional liquidator for the wind up.  Until and unless a
provisional liquidator is appointed pursuant to the application
to the Court by the Petitioner to appoint provisional liquidator
for Metroplex, the winding-up petition will not have significant
impact on the Group's operations as MB is currently working out
a debt-restructuring scheme.  In the event the wind-up petition
succeeds, the Company will be put into liquidation.   


METROPLEX BERHAD: 43rd Annual General Meeting Slated for July 19
----------------------------------------------------------------
Metroplex Berhad's 43rd Annual General Meeting will be held  on
July 19, 2006, at 2:30 p.m., at Ballroom 1, 9th Floor, The
Legend Hotel, in 100 Jalan Putra, Kuala Lumpur.

During the meeting, members will be asked to:

   -- receive and adopt the Audited Financial Statements for
      the financial year ended January 31, 2006, together with
      the Reports of the Directors and Auditors;

   -- approve the payment of Directors' fees for the year
      ended January 31, 2006;

   -- re-elect as directors

        * Lim Siew Kim;
        * Kee Lian Yong; and
        * Dato' Dr. Yahya bin Ismail;

   -- reappoint Mesrs BDO Binder as auditor of the Company
      and to authorize the Company's directors to fix its
      remuneration;

   -- authorize the Directors to issue shares in the Company
      at any time until the conclusion of the next Annual
      General Meeting;

   -- allow the Company and its subsidiaries to renew the
      existing Shareholders' Mandate to enter into recurrent
      related party transactions of a revenue or trading nature;
      and

   -- approve the deletions, alterations, amendments,
      modifications, variations and additions to the Company's
      Memorandum and Articles of Association.

                     About Metroplex Berhad

Headquartered in Kuala Lumpur, Malaysia, Metroplex Berhad's
activities are hotel and casino operations.  Other activities
include property investment, property development, provision of
administrative services, general and building construction,
leasing and financing, trading of building materials and
operation of hotel management training school.  Operations are
carried out in Malaysia, Hong Kong and Philippines.  On April
28, 2005, Morgan Stanley Emerging Markets Inc. had filed a
winding-up petition on the Company to the Kuala Lumpur High
Court.  Morgan Stanley also filed for a summons to appoint a
provisional liquidator for the wind up.  Until and unless a
provisional liquidator is appointed pursuant to the application
to the Court by the Petitioner to appoint provisional liquidator
for Metroplex, the winding-up petition will not have significant
impact on the Group's operations as MB is currently working out
a debt-restructuring scheme.  In the event the wind-up petition
succeeds, the Company will be put into liquidation.


MYCOM BERHAD: Government Asserts MYR4.3-Mil Claim Against Unit
--------------------------------------------------------------
Mycom Berhad's wholly owned subsidiary, Oakland Holdings Sdn
Bhd, on June 23, 2006, received Writs of Summons filed by the
Government of Malaysia for a total claim of MYR4,231,185, with
costs.

The claims were for defaulted tax and penalties for the years of
assessments from 2001 to 2004.  

Mycom -- which has a total investment of MYR36,939,800 in
Oakland Holdings -- said there is no further financial and
operational impact on the Mycom Group as the amounts claimed
have been fully provided in the accounts of the subsidiary.  The
payment of the defaulted taxes and penalties are expected to be
settled from the proceeds of the special issue after the
completion of the Restructuring Scheme of the Mycom Group.

Mycom's board of directors will seek the advice of its
solicitors on the necessary defense actions including seeking an
amicable settlement with the plaintiff.

                       About Mycom Berhad

Headquartered in Kuala Lumpur, Malaysia, Mycom Berhad is engaged
in the provisions of granite quarry services, manufactures and
sells latex rubber thread, tape, plywood, laminated board and
sawn timber, cultivates oil palm fruits, and develops property.

The Company is also involved in hotel operation, provision of
management and financial services and investment holding.  
Operations of the Group are carried out in Malaysia and South
Africa.

Mycom is in the advanced stage of negotiations to settle its
foreign debts.  The proposed capital reduction and consolidation
by Mycom, as well as the proposed share premium account
reduction will reduce the Company's accumulated losses.  In its
proposal to streamline its operations and focus on property
development activities after restructuring, Mycom had proposed
to undertake a series of acquisitions of property companies and
land, as well as the disposal of certain assets in the future
years.  Mycom believes that both its corporate and debt
restructuring would the group on a stronger financial footing to
continue as a going concern, to return to profitability and to
enhance returns to all the stakeholders.

As of March 31, 2006, the Company's balance sheet showed poor
liquidity with MYR56,129,000 in current assets available to pay
current liabilities of MYR1,302,071,000 coming due within the
next 12 months.


POLYMATE HOLDINGS: Hong Leong Bank Files Claims Payment Suit
------------------------------------------------------------
Polymate Holdings Berhad and its wholly owned subsidiary, ABI
Malaysia Sdn Bhd, received on June 23, 2006, a Writ of Summons
and Statement of Claim dated June 14, 2006, from Hong Leong Bank
Berhad.

In its claims, Hong Leong seeks payment of:

   -- MYR21,398,497, inclusive of outstanding principal of
      MYR19,975,479 as of March 31, 2006, together with
      interest at 3.5% above the Base Lending Rate per annum,
      compounded monthly, from April 1, 2006, to the date of
      full payment;

   -- MYR306,154, inclusive of outstanding principal of
      MYR283,445 as of March 31, 2006, together with interest
      at the rate of 3.5% above the Base Lending Rate per annum,
      compounded monthly, from April 1, 2006, to the date of
      full payment;

   -- MYR109,673, inclusive of outstanding principal of
      MYR101,111 as of March 31, 2006, together with interest
      at the rate of 3.5% above the Base Lending Rate per annum,
      compounded monthly, from April 1, 2006, to date of full
      payment;

   -- MYR613,918, as of March 31, 2006, together with interest
      at the rate of 1.25% per annum at the amount within the
      authorized limit of MYR600,000 and 2.5% above the Base
      Lending Rate per annum on the excess over the authorized
      limit, both on daily rests, compounded monthly, from
      April 1, 2006, to the date of full payment;

   -- MYR201,894, inclusive of principal of MYR200,000
      together with interest at the rate of 9.5% per annum
      compounded monthly from April 1, 2006, to the date of full
      payment;

   -- MYR8,000, together with interest at the rate of 9.5% per
      annum compounded monthly from the date payment on the Bank
      Guarantees is made by Hong Leong to the beneficiary of the
      Bank Guarantees to the date of full payment by Polymate;

   -- costs on a solicitor-client basis; and

   -- such further and other relief as the Court deems fit.

The Troubled Company Reporter - Asia Pacific recounts that
Polymate Holdings and ABI Malaysia were served with a Writ of
Summons and Statement of Claim from other claimants:

         Claimant                    Amount Asserted
         --------                    ---------------
         Malayan Banking               MYR10,014,145
         CDP Engineering Sdn Bhd.          MYR10,675
         Lianma Enterprise                  MYR9,778
         Metal Reclamation
            (Industries) Berhad           MYR857,992

The claims have various default interest rates.

                  About Polymate Holdings Berhad

Headquartered in Selangor Malaysia, Polymate Holdings Berhad
-- http://www.polymate.com.my/Hprofile_html.htm-- is engaged in  
the manufacturing and marketing of lead acid batteries for the
automotive and related industries.  It is also engaged in the
manufacturing and dealing of plastic articles and products,
corrugated carton boxes and related products, manufacturing and
trading of door closers and trading of building materials,
investment holding and provision of corporate and financial
support services.  The Group operates in Malaysia, Australia,
New Zealand and Europe.

Polymate Holdings is in the process of working out possible
plans to regularize its condition.  Operations in its
subsidiaries will be revived when a workable restructuring
scheme is formalized with its lenders and when fresh working
capital can be injected into the operations.  On April 28, 2006,
Bursa Malaysia Securities Berhad publicly reprimanded and
imposed a total fine of MYR84,000 on Polymate Holdings Berhad
for breach of the Bourse's Listing Requirements. This was
followed by another public reprimanded on May 26, 2006.

Meanwhile, Polymate says that it is still negotiating with its
lenders to restructure the Group's credit facilities and is
working on various schemes to regulate its financial position.


PROTON HOLDINGS: To Enter Indonesian Retail Market in 2007
----------------------------------------------------------
Proton Holdings Berhad is set to test drive the car retail
market in Indonesia next year despite the current sluggish
demand, The Jakarta Post relates.

The Malaysian carmaker plans to initially bring in three or four
models to its retail customers on Jakarta.  Proton will then
promote its brand and network dealers in January 2007, The Post
says.

As a first step to gaining a foothold in Indonesia, Proton will
continue to market the Proton Wira to taxi operators in Jakarta
Surabaya and Medan.  According to The Post, Proton manufactures
around 300 Wira sedans per month at its USD20-million plant in
Cikarang, West Java, which has full capacity of 50,000 cars a
year.

The Company is confident that Indonesian customers would still
be attracted to the Proton Wira even though the model is
primarily used by taxi firms in the country.

"The fact that it is used by taxi companies proves our cars'
reliability so that customers do not have to worry.  The Wira
has been proven not only in Malaysia, but also in other
countries," a Proton executive said.

Proton Holdings is also awaiting confirmation from the
Indonesian government of 5% duty under the common effective
preferential tariff adopted by ASEAN countries, according to the
Post.

The Malaysian company is hoping to sell about 3,000 cars per
year when it fully launches it Indonesian operation in 2007, The
Post adds.

                     About Proton Holdings

Headquartered in Selangor Darul Ehsan, Malaysia, Perusahaan
Otomobil Nasional Berhad or Proton Holdings Berhad
-- http://www.proton-edar.com.my/-- is engaged in  
manufacturing, assembling, trading and provision of engineering
and other services in respect of motor vehicles and related
products.  Its other activities include property development,
trading of steel and related products, engine and technologies
research, development of automotive related technologies,
investment holding, importation and distribution of motor
vehicles, related spare parts and accessories, holds
intellectual property, provides engineering consultancy,
operates single make race series and carries out specific
engineering contracts.  The Group's operations are carried out
in Malaysia, England, Australia, Socialist Republic of Vietnam
and the United States of America.

Proton was reported to be among Malaysia's worst-performing
companies in 2005, after competition from foreign carmakers and
a lack of new models lost the firm local market share and
subsequently led it into a loss.  It has since brought in a new
chief, sold its loss-making MV Agusta motorbike firm and pledged
to find a new technology partner.  The Company has been under
increasing pressure, with its share of domestic sales falling to
44% from 75% over the past decade.

The Troubled Company Reporter - Asia Pacific reported on May 4,
2006, that Proton was expected to finalize a recovery plan and
seal an alliance with a strategic partner by the end of this
year.


* Malaysia Eyes Sustained Deficit of 3%-3.5% of GDP
---------------------------------------------------
Malaysia is looking to maintain a budget deficit of 3%-3.5% of
gross domestic product before moving towards a balanced budget,
The Edge Daily relates, citing Reuters.

The country has run a fiscal shortfall since 1998, enabling it
to endure the late-1990s Asian economic crisis and, in more
recent years, decreases in global demand for electronics -- its
main export.  In 2005, the deficit burden was 3.8% of GDP.

Three years ago, the administration of former prime minister Tun
Dr Mahathir Mohamad vowed to cut its budget deficit to 1%-2% of
GDP by 2005 and balance its books in 2006, The Edge says.

However, Mr. Mahathir's successor -- Datuk Seri Abdullah Ahmad
Badawi -- scrapped that timetable after taking power in late
2003, calling it too aggressive.  Abdullah's administration,
however, has not produced a new timetable.  

According to Reuters, the slower pace of deficit reduction has
become a concern for credit-rating agencies such as Standard &
Poor's which last year said that Malaysia had a higher deficit
and higher debt levels than other countries with an A-minus
foreign currency rating.


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

METRO PACIFIC: SEC Approves New Investment Firm
-----------------------------------------------
The Securities & Exchange Commission approved the incorporation
of Metro Pacific Corp's new investment holding firm -- Metro
Pacific Investments Corp. -- the Philippine Star reports.

In a document submitted to the SEC, MPIC's capital, amounting to
PHP4.6 billion, consists of PHP.5 billion in subscribed shares
and PHP815.1 million in cash.  MPIC is 76% owned by Metro
Pacific's parent firm, First Pacific Group of Hong Kong.

The formation of MPIC is part of Metro Pacific's reorganization
plan, which has three phases.  The first stage consists of the
Company reducing its authorized capital stock and a resulting
reverse stock split.  Metro Pacific would also sell its entire
stake in Landco Pacific Corp. at fair value, pending the release
of Landco shares promised to certain creditors.

Metro Pacific formed MPIC to expand its real estate business and
raise capital for its infrastructure and consumer products
business.  Landco will become the core business of MPIC, and
needs PHP4.3 billion for its expansion.

In the second phase of reorganization, MPIC will offer its
shares for the outstanding shares of Metro Pacific on a one-for-
one basis.  MPIC will list its shares on the Philippine Stock
Exchange, after which Metro Pacific shares would be delisted.  
When this phase is complete, MPIC would now own 00% of Metro
Pacific, which will continue to operate as an unlisted firm that
owns shipping firm Negros Navigation Co. and other assets.  MPIC
would also hold an 87% stake in Landco Pacific Corp.

The third stage of the reorganization entails MPIC offering a
rights issue to raise PHP2.7 billion in capital.

Metro Pacific is looking into investing in the consumer food
business, infrastructure and power generation to be able to
generate growth in the long term.

The Troubled Company Reporter - Asia Pacific reported on June 4,
2006, that Metro Pacific posted a consolidated income of
PHP28 million for the first quarter ended March 31, 2006,
against a PHP70.33-million net loss for the same period last
year.

                          *     *     *

Metro Pacific Corporation -- http://www.metropacific.com/-- is  
the flagship publicly listed investment and management company
of the First Pacific Group in the Philippines.  The Company,
which was formerly known as Metro Drug, Inc., has since then
evolved from a pharmaceutical and consumer products distribution
company into one of the country's leading corporations.

Metro Pacific has these significant subsidiaries:

   * Landco, Inc.
   * Metro Tagaytay Land Co. Inc.
   * Negros Navigation Co. Inc.
   * Lucena Commercial Land Corporation
   * First Pacific Realty Partners Corporation
   * Landco Pacific Centers, Inc.

From its beginnings in 1986, MPC has evolved into a diversified
conglomerate with interests in real estate, telecommunications,
transportation, consumer, packaging, and banking.  With the sale
of the Company's remaining telecommunication, consumer product
and packaging assets during the year, it is now established as
one of the country's leading property developers and real estate
investors.

                      Going Concern Doubt

Marydith C. Miguel, of Sycip Gorres Velayo & Co., raised
significant doubts on MPC's ability to continue as a going
concern after auditing the Company's annual report for the
period ended December 31, 2005.

Ms. Miguel noted in the auditors report that MPC suffered
significant losses in prior years leading to its inability to
meet its maturing obligations, on principal and interest, to
certain third-party lenders and to a related company.  Although
the Company has generated a PHP194.26-million net income
attributable to equity holders for the year ended December 31,
2005, it continues to reflect a deficit of PHP27.5 billion as of
December 31, 2005, due to prior year's accumulated losses.

In response to these matters, the Company continues to implement
measures geared towards generating liquidity to meet maturing
obligations and profitability, including debt rehabilitation
activities and a capital restructuring plan.

                      Debt Rehabilitation

Since the start of its debt reduction program in 2001, the
Company has achieved substantial progress in its debt
restructuring negotiations with lenders and concluded
significant debt settlement agreements with various third-party
lenders.  As of April 24, 2006, MPC was able to reduce its
interest-bearing debts from PHP11.70 billion in 2001 to
PHP565.80 million (PHP648.80 million as of December 31, 2005).  
The Company also expects to settle additional debt of
PH349.30 million via asset-for-debt swap within the third
quarter of 2006.  Negotiations are also ongoing to settle the
remaining debts totaling PHP216.50 million.


NATIONAL POWER: ERC OKs Power Generation Rates
----------------------------------------------
The Energy Regulatory Commission has permitted National Power
Corp. to pass on the generation rates of power coming from its
Ilijan plant to consumers via the generation rate adjustment
mechanism, the Manila Bulletin relates.

The Electric Power Industry Reform Act had not allowed Napocor
to pass on generation costs for certain plants -- like its
Ilijan plant -- to consumers, where the rates have not been
approved by the now-defunct Energy Regulatory Board as of
December 3, 2000.  As a result, the Company's finances were
affected since it had to absorb and refinance the costs.

With the Ilijan plant, Napocor had to absorb capacity payments
amounting to PHP8.6 billion in 2003 and 2004, without recovering
them from consumers.  The Company also has banked gas worth
PHP26.2 billion in its take-of-pay gas supply agreement with
Shell Philippines Exploration B.V., due to the very low gas
utilization of its Ilijan plant.

The Commission ruled that Napocor's power generation rates would
be dollar-denominated at US$7.25 per kilowatt-hour every month.  
Fixed operating and maintenance costs amount to US$0.76 per kWh
and PHP7.25 per kWh monthly, whereas energy fees would cost
US$0.00013 per kWh plus PHP0.0012 per kWH.  According to the
ERC, the passing of the power rates to consumers would lead to
"lower bills than other existing plants."

                      About National Power

Headquartered in Quezon City, Philippines, National Power Corp.
-- http://www.napocor.gov.ph/-- is a state-owned utility that  
builds and operates nuclear, hydroelectric, thermal, and
alternative power generating facilities.  It works with
independent producers under a build-operate-transfer program.  
With a generating capacity of more than 11,500 megawatts,
National Power sells electricity to distributors and industrial
companies.

National Power first incurred losses in 1998 after the Asian
financial crisis and expensive contract terms from independent
power producers, and reported a PHP29.9 billion loss in 2004,
after a PHP117-billion net loss in 2003.  

The Troubled Company Reporter - Asia Pacific reported on
April 5, 2006, that National Power posted a PHP16 million profit
in 2005, the first time in seven years, on the Energy Regulation
Commission's approval of a rate increase, the use of an improved
fuel mix and better fuel prices.

A subsequent report by the TCR-AP states that in the first
review of National Power's portfolio, it was projected that the
Philippine Government would have to absorb some PHP600 million
worth of debt.  The Government initially absorbed Napocor's
PHP200-billion debt, which was incurred when the state firm
adopted international accounting standards, forcing it to report
its foreign exchange losses.  The Department of Finance is
studying the legality of the Government's absorption of the
debt.

To comply with the privatization bill approved by the Philippine
Congress, the Company started selling off its generation assets
to help pay for the utility's total estimated debt.  It also
separated its transmission operations into a new subsidiary, the
National Transmission Corporation.

Napocor's remaining debt could still be absorbed by the
Government, but the Development Budget Coordinating Committee
wants to see the Company improve operations and sell off non-
profitable assets in order to reduce its debt, instead of
relying on government aid to do so.  


=================
S I N G A P O R E
=================

LEIGHTON INVESTMENTS: Accepting Proofs of Debt Until July 23
------------------------------------------------------------
The creditors of Leighton Investments Pte Limited are required
submit proofs of debt to the Company's liquidators by July 23,
2006.

Failure to comply with the requirement will exclude any creditor
from sharing in any distribution the Company will make.

Contact: Tam Chee Chong
         Liquidator
         c/o 6 Shenton Way #32-00
         DBS Building Tower Two
         Singapore 068809


HESHE HOLDINGS: SGX-ST OKs Listing & Quotation of Rights Shares
---------------------------------------------------------------
Heshe Holdings Limited, on June 26, 2006, received in-principle
approval from the Singapore Exchange Securities Trading Limited
for the listing and quotation of up to 276,047,322 new ordinary
shares in the issued and paid-up share capital of the Company on
the SGX-ST Dealing and Automated Quotation System.

The in-principle approval is, however, subject to:

   -- a written undertaking from the Company to make periodic
      announcements on the use of the Rights Issue proceeds as
      and when the funds from the Rights Issue are materially
      disbursed and to provide a status report on the use of the
      Rights Issue proceeds in the annual report of the Company;
      and

   -- a written confirmation on the availability of the share
      issue mandate which must be valid at the time of issue of
      the Rights Shares.

The Rights Shares were derived from the Company's Renounceable
and Partially Underwritten Rights Issue announced on April 5,
2006.  The Rights Issue involved of up to 276,047,322 new
ordinary shares in the issued and paid-up share capital of Heshe
Holdings at an issue price of SGD0.05 for each rights share on
the basis of two rights shares for every five existing shares in
the issued and paid-up share capital of the Company held as at
the books closure date, fractional entitlements being
disregarded.

Information on the details of the Rights Issues including the
books closure date to determine the entitlement of shareholders
of the Company, will be announced in due course.

                   About Heshe Holdings Limited

Singapore-based Heshe Holdings Ltd is an investment holding and
property investment company. The principal activities of its
subsidiaries are those of investment holding, garment
manufacturers, importers, exporters and wholesalers in ready-
made wearing apparel, operators of restaurants and franchise
system for chains of specialty restaurants, retailers of wine
and wine-related products and property investors and developers.  
As of fiscal 2005, the Company has a net profit margin of -
502.57%, and an operating margin of -463.83%.  Return of average
assets is -65.38% and the return on average equity is -277.91%,
according to Google Finance.


MAE ENGINEERING: Fixes Books Closure Date on July 11
----------------------------------------------------
The Share Transfer Books and the register of Members of MAE
Engineering Limited will be closed at 5:00 p.m. on July 11,
2006, for the purpose of determining the provisional allotments
of Rights Shares with Warrants to Shareholders with registered
addresses in Singapore as of the books closure date.

For practical reasons and in order to avoid any violation of the
securities legislation applicable in countries other than
Singapore, the Rights Shares with Warrants will not be offered
to Shareholders with registered addresses outside Singapore as
at the Books Closure Date and who have not, at least five market
days prior to the Books Closure Date, provided to The Central
Depository (Pte) Limited or the Company, as the case may be,
addresses in Singapore for the service of notices and documents.

Entitled Shareholders whose securities accounts with CDP are
credited with Shares as at 5:00 p.m. on the Books Closure Date
will be provisionally allotted the Rights Shares with Warrants
under the Rights Issue on the basis of the number of Shares
standing to the credit of their securities accounts with CDP as
at 5:00 p.m. on the Books Closure Date.

A Shareholder whose securities account with CDP is credited with
Shares and who has a registered address outside Singapore may
provide CDP, at 4 Shenton Way #02-01, SGX Centre 2, Singapore
068807, with a registered address in Singapore for the service
of notices and documents no later than 5:00 p.m. on July 4,
2006.

Meanwhile, Entitled Shareholders whose Shares are not registered
with CDP and whose names appear in the Register of Members of
the Company as at 5:00 p.m. on the Books Closure Date, will be
provisionally allotted the Rights Shares with Warrants under the
Rights Issue on the basis of the number of Shares held as stated
in the Register of Members as at 5:00 p.m. on the Books Closure
Date.

A Shareholder whose Shares are registered in his own name in the
Register of Members of the Company and having a registered
address outside Singapore, may provide the Company's share
registrar, Lim Associates (Pte) Ltd at 10 Collyer Quay, #19-08,
Ocean Building, Singapore 049315, with a registered address in
Singapore for the service of notices and documents no later than
5:00 p.m. on July 4, 2006.

Duly completed and stamped transfers in respect of Shares not
registered in the name of CDP together with all relevant
documents of title received up to the close of business at 5:00
p.m. on the Books Closure Date by the Share Registrar will,
subject to the Articles of Association of the Company, be
registered to determine the provisional allotments of the Rights
Shares with Warrants of the Entitled Shareholders under the
Rights Issue.

                 About MAE Engineering Limited

Headquartered in Singapore, MAE Engineering Limited is engaged
in the provision of integrated electrical and mechanical
engineering services including designing, planning and
procurement.  These services are categorized into electrical
installations, mechanical installations, electrical power supply
installations, instrumentation and building automation as well
as maintaining electrical and mechanical systems.  The Group
also offers consulting and specialist services to oceanariums
and aquariums.  The Group has disposed off its prawn and fish
farming as well as edutainment businesses, after suffering
accumulated losses of SGD48 million as of September 30, 2005.  
The Company also suffered a liquidity crunch since September 30,
2005, when its total current liabilities of SGD23,695,000
exceeded its total current assets of SGD5,582,000.

As of March 31, 2006, the Company's balance sheet showed
SGD7,404,000 in total assets and SGD27,257,000 in total
liabilities, resulting in a SGD19,853,000 stockholders' equity
deficit.  The Company's March 31 balance sheet also revealed
strained liquidity with SGD6,346,000 in total current assets
available to pay SGD27,200,000 in total current liabilities
coming due within the next 12 months.


PERPETUAL HOLDINGS: Wind-Up Petition Hearing Slated for June 30
---------------------------------------------------------------
Justice V K Rajah of the High Court of the Republic of Singapore
will hear a wind-up application against Perpetual Holdings Pte
Limited on June 30, 2006, at 10:00 a.m.

The petition was filed through Solicitor Goh Aik Leng &
Partners.


ROGERS WORLDWIDE (S): Court to Hear Wind-Up Petition on June 30
---------------------------------------------------------------
Justice V K Rajah of the High Court of the Republic of Singapore
will hear a wind-up application against Rogers Worldwide (S) Pte
Limited on June 30, 2006, at 10:00 a.m.

The petition was filed through Solicitor Joseph Tan Jude Benny.
   
   
SEARA FOOD: Creditors Must Prove Debts by July 23
-------------------------------------------------
Liquidator Lau Chin Huat will be receiving proofs of debt from
creditors of Seara Food Asia Pte Limited until July 23, 2006, in
order for creditors to benefit from the Company's dividend
distribution.

Contact: Lau Chin Huat
         Liquidator
         c/o Shenton Way #32-00
         DBS Building Tower Two
         Singapore 068809


WORLD DIGITAL: To Hold Creditors Meeting on July 17
---------------------------------------------------
Creditors of World Digital Network News Pte Ltd. will hold their
first meeting on July 17, 2006, at 12:00 noon, at 20 Cecil
Street #12-02/03, in Singapore 049705.

At the meeting, creditors will discuss the Company's wind-up
affairs and consider the appointment of a Committee of
Inspection if necessary.

Contact: Ong Wei Leng
         Liquidator
         c/o Ong Wei Leng & Co.
         Certified Public Accountants
         10 Ubi Crescent #03-46
         Ubi Techpark (Lobby C0
         Singapore 408564
         Telephone: 6745 5433/6746 6022
         Fax: 6746 0688


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

NAKORNTHAI STRIP: To Sell Secured Rights to G Steel Pcl
-------------------------------------------------------
G Steel PCL revealed on June 27, 2006, that it would invest
US$180 million to buy a secured right which will be used to
convert Nakornthai Strip Mill Public Company Limited's debt into
equity, Reuters reports.

According to Reuters, the deal was part of Nakornthai's debt
restructuring plan.

G Steel said that it would spend US$60 million of the whole sum
on buying new shares from Nakornthai, while its subsidiary,
Oriental Investment, would invest US$120 million in Nakornthai.

                          *     *     *

Nakornthai Strip Mill Public Company Limited is a Thailand based
manufacturing company.  The Group's principal activities are
manufacturing and selling of hot-rolled coil steel.  These
products can be used in downstream industries such as structural
steel industry, container industry, steel pipe industry and gas
tank industry.

The Troubled Company Reporter - Asia Pacific reported on May 4,
2006, that Nakornthai has announced a recapitalization plan
involving THB4 billion in debt restructuring to ensure a US$50-
75 million credit line for working capital.


PAE THAILAND: Board Approves Change in Share Par Value
------------------------------------------------------
The board of directors of PAE Thailand Public Company Ltd
approved on June 23, 2006, a change in share par value of the
Company to THB1 from THB10.

Moreover, the board also resolved to pursue a public offering of
817 million unsubscribed capital-increase shares with a par
value of THB1.   Of the total shares, 191.5 million will be
offered to existing shareholders at a ratio of two existing
shares to one new share at THB0.60 each, and 625.5 million to
selected investors at a minimum price of THB0.60 each.  

The Company also appointed Chaichana Sangjan as managing
director while Verapong Chaimuksic and Thippawan Uthaisang were
appointed as directors.

                          *     *     *

PAE Public Company Limited -- http://www.pae.co.th/-- is a  
Thailand-based company currently undergoing business
rehabilitation and is categorized under the Rehabco Sector of
the Stock Exchange of Thailand.


* Asian Bank Systems Continue to Face Economic Risks, S&P Says
--------------------------------------------------------------
Banking systems in Asia have achieved a good measure of
stability, although that in China is facing increasing
vulnerability from rapid credit expansion, said Standard &
Poor's Ratings Services stated in two separate commentaries.

"The situation in Asia reflects the improved financial profiles
of banks across the region," said Standard & Poor's credit
analyst Ritesh Maheshwari, in the commentary titled "Bank
Industry Country Risk: The Asia Picture."

"Healthy macro factors and strong earnings have boosted bank
performance and lifted asset quality in the past few years, and
risk-management practices and regulatory environments generally
have strengthened," Mr. Maheshwari noted.

Nevertheless, Asian banking systems continue to face medium-to-
high economic and industry risks, unexpected shocks, and the
inevitable future cyclical slowdown.  "An economic slowdown
would be the litmus test for the banks' credit-risk-management
systems, though it should be noted that banking systems will
face the potential challenges from a position of strength, given
the structural improvements made since the Asian financial
crisis," said Standard & Poor's credit analyst Ping Chew.

China's increasing vulnerability of the banking system reflects
high economic and industry risk in the sector, despite
improvements in its fundamentals in the past few years, said Mr.
Chew, in a commentary titled "Rapid Rise In Interest Rates Or
Renminbi Could Stretch China's Embryonic Banking System."

"Although the banks in China are increasingly operating on a
commercial basis, their developing credit and risk management
systems are likely to be severely stretched by rapidly changing
economic conditions and the relatively high gearing of the
corporate sector," said Standard & Poor's credit analyst
Ryan Tsang.

A rapid rise in interest rates or renminbi could further stretch
China's embryonic banking system.  Standard & Poor's estimates
that if the Chinese renminbi appreciates by 25% and interest
rate increases by 200 basis points-both rapidly-the corporate
sector's net profit could decrease by about one-third and the
banking sector's NPLs ratio could rise by up to nine percentage
points, should both sectors fail to take any countermeasures to
mitigate risks and losses.

The report is available to subscribers of RatingsDirect,
Standard & Poor's Web-based credit research and analysis system,
at http://www.ratingsdirect.com/




                            *********


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 newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland, USA.  Catherine Gutib, Valerie Udtuhan, Francis
Chicano, Erica Fernando, Reiza Dejito, Freya Natasha Fernandez,
and Peter A. Chapman, Editors.

Copyright 2006.  All rights reserved.  ISSN: 1520-9482.
   
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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                 *** End of Transmission ***