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             A S I A   P A C I F I C      

      Thursday, April 9, 1998, Vol. 1, No. 36

                    Headlines

C H I N A   &   H O N G   K O N G

MANSION HOUSE: Missing Executive Allegedly Stole Funds
THEME: Retailer Agreement with Creditors to Freeze Debt


J A P A N  

TAISEI CORP: Rating Lowered to 'Negative' by Moody's


K O R E A

KIA MOTORS: Competiveness May be Threatened by Hyundai
KIA MOTORS: Hyundai Wants Kia and Asia Motors


M A L A Y S I A

HALIM SECURITIES: Proposed Restructuring by Parent


P H I L I P P I N E S

ORIENT COMMERCIAL BANK: Rizal Withdraws Rescue Offer




C H I N A   &   H O N G   K O N G

MANSION HOUSE: Missing Executive Allegedly Stole Funds
------------------------------------------------------
Police are searching for a senior dealing executive at
Mansion House Securities (Far East) who disappeared late
last week after allegedly stripping a client's account of
$68 million, the firm said. The allegations - the latest
involving smaller local brokers - threaten to severely
undermine the financial position of Mansion, which suffered
from a decline in client confidence after the collapse of
broker CA Pacific.

Mansion House said it had received a solicitor's letter on
Saturday from one of the missing executive's clients which
cited recent account statements and claimed the client had
a balance of $68 million. Investigations into the conduct
of the errant executive indicated the missing funds might
be considerably larger than the initial $68 million
mentioned in the solicitors letter. The firm said the
executive - whose identity is unknown - managed 72
accounts, about one-third of which were shown to have nil
balances.

Mansion House was forced in February to reassure investors
its financial position was sound, following the collapse of
fellow brokerage CA Pacific. Director Irene So Wai-yin said
at the time that account holders had become nervous about
the security of their shares and some had decided to
withdraw accounts. She admitted the firm's exposure to
margin lending had increased last year compared with 1996
but emphasised its backing was sound and its balance sheet
strong.

Despite the reassurances, there were persistent market
rumours the company was being scrutinised by the Securities
and Futures Commission and might need financial support
from its parent. These rumours were once again denied by Ms
So, who said the company's client base was about 10,000.
The allegations are likely to spark a sharp reaction today
as Mansion House Securities' clients seek reassurance their
funds are secure.

There is no link between Mansion House Group and fellow
listed company Mansion Holdings.
(South China Morning Post 08-Apr-1998)


THEME: Retailer Agreement with Creditors to Freeze Debt
-------------------------------------------------------
Troubled retailer Theme International Holdings is close to
signing an agreement with creditor banks to freeze
repayment of about $400 million in debts, sources said. The
agreement was understood to be a prerequisite for
resumption of trading in the company's shares on April 22.
Theme had already reached an unwritten debt-freeze
agreement after shareholder China Everbright made $80
million in cash available to the company in exchange for an
option to raise its stake to 32 per cent from 20 per cent.
Sources said China Everbright's decision to rescue Theme
was aimed at convincing about 10 bank creditors to support
the company financially.

Financial adviser KPMG Peat Marwick said in a report that
Theme was experiencing "acute liquidity problems".

The problems were triggered by two Japanese banks, which
withdrew bank lines from a range of Hong Kong retailers,
including Theme, in January. Some analysts attributed
Theme's woes to its aggressive expansion programme into
China, Taiwan and Singapore. A Theme spokesman yesterday
disagreed, saying the troubles lay with the sudden downturn
in the retail market in Hong Kong.
(South China Morning Post 08-Apr-1998)

Summary of the KPMG report, dated 02-Feb-1998:

1. The Group currently has no trade lines or overdraft
facilities available to it.

2. The KPMG Report indicates that the Group will require
approximately HK$67 million to HK$72 million in working
capital facilities before the end of April, 1998 in order
to purchase new materials for the Autumn/Winter lines and
re-supply the current Spring/Summer lines.  Based on
forecast information, the cash flow position is projected
to be increasingly positive throughout the year.

3. Without standstill arrangements with the banks and/or
the availability of new facilities, the Group's directors
may have no option other than to appoint a provisional
liquidator to the Group in order to preserve its assets.

4. The directors of the Company can justify continuing to
trade as long as they can assume the Group's bank creditors
are willing to standstill and/or sufficient working capital    
will be made available.

5. With the Group's bank debts for Hong Kong and Taiwan
operations totalling approximately HK$391 million the cash
flow produced from operations is probably not sufficient or
timely enough to reduce bank debts to an acceptable level.
The Group therefore needs to consider some form of capital
injection or the sale of non-core assets.

6. The Group has established a strong retail presence
through an extensive network which, with the vertical
integration of its operations, gives it the ability to
complete the full cycle from design, manufacture,
distribution and retailing.  The Group has a strong
management information system which enables a quick and   
detailed delivery of information.  The Group's    
manufacturing facilities in the People's Republic of China
(the "PRC") are well equipped and the Group has a stable
and experienced management team in the core business.
(SEHK 07-Apr-1998)


J A P A N  

TAISEI CORP: Rating Lowered to 'Negative' by Moody's
----------------------------------------------------
US ratings agency Moody's Investors Service yesterday has
cut to "negative" its outlook for constructor Taisei Corp.
Moody's move came as Taisei said it would halve the number
of overseas units in five years due to falling orders amid
Asia's economic crisis.

On Monday, it said it would suffer a group net loss of 67
billion yen (about HK$3.81 billion) for the year to March,
writing down the value of its property holdings (TCRAP 08-
Apr-1998). Moody's said: "Taisei still has sizeable
exposures to the weak real-estate market, and its
fundamental earnings remain under pressure." The agency
held the firm at its medium grade Baa2 senior debt rating.
(South China Morning Post 08-Apr-1998)


K O R E A

KIA MOTORS: Competiveness May be Threatened by Hyundai
------------------------------------------------------
The Korean auto industry will lose its competitiveness in
international markets if Hyundai or Samsung takes over Kia
Motors due to excessive competition that will be created
between the two business conglomerates, a research
institute has claimed. Kia Economic Research Institute
(KERI), an affiliate to the Kia Group, had made the claim
in its report on the optimum number of Korean automakers.
The report has come out amid competition between the two
business giants to take over troubled Kia Motors.

The institute said, "If the nation's auto industry is
restructured to the two makers of Hyundai and Daewoo, the
number of effective competitors will be 1.8, becoming wider
in difference with advanced countries. As a result, Korea's
auto industry will lose its competitiveness." It claimed
that at least three sellers will guarantee a competitive
edge although the number of effective competitors falls far
short of that in advanced nations.

The institute said, "If Hyundai takes over Kia, the
effective competition will disappear, reducing the
selection rights of consumers. If Samsung takes over Kia,
excessive competition will be made between the two chaebol.
As a result, a tripartite competition system should be kept
on condition that Kia would stand on its own feet."
(Korea Times 08-Apr-1998)


KIA MOTORS: Hyundai Wants Kia and Asia Motors
---------------------------------------------
A top executive of Hyundai Motor Co. said yesterday that
the company has been considering taking over both Kia
Motors and its sister truck and bus maker Asia Motors in a
package.

"We have been studying taking over both automobile makers,
now virtually bankrupt, in a package," Hyundai Motor
president Park Byung-jae told reporters over a luncheon.
He said that Hyundai has given up a joint proposal with
Daewoo Motor to manage Kia Steel Co. to revive the
specialty steelmaker, on the judgment that it will not help
the steelmakers' plight.

Park also called on the government and creditors of Kia
Motors to unveil outlines on the disposal of Kia Motors as
soon as possible so that Hyundai can prepare a concrete
takeover program.

"All facts available on the Kia issue have been unearthed.
Five to six alternative routes have been reported in the
news media. But the government and creditors have yet to
decide which one they will take to resolve the issue. As a
result, we can not take steps," Park told reporters,
expressing strong hopes of taking over the troubled Kia
Motors.

He warned that the current situation is so serious that the
whole Korean auto industry might sink unless the issue is
handled carefully. "The issue of Kia Motors should be
handled to the overall benefit of the Korean auto
industry," Park said, implying that Hyundai Motor is an
appropriate bidder for Kia.

Touching on ways of raising funds needed to take over Kia
Motors, Park said, "We will not follow others' paths,"
referring to Daewoo's take-over deal of Ssangyong Motor. In
the deal, Daewoo has been given a 10-year grace period for
half of the Ssangyong Motor's debt repayment with the
remaining half to be shouldered by the Ssangyong Group.
Creditors have also committed an extension of 150 billion
won in operating funds to Daewoo.

Park said, "We are considering raising funds from inside of
Hyundai, foreign sources and other means available."

He did not rule out cooperation with foreign carmakers,
such as General Motors Corp. and Ford Motor Co. "If
necessary, we will contact foreign automakers. They are our
competitors but can become our partners," Park said, adding
that Hyundai has had no contact with foreign makers so
far.
(Korea Times 07-Apr-1998)


M A L A Y S I A

HALIM SECURITIES: Proposed Restructuring by Parent
--------------------------------------------------
Uniphoenix Corporation Bhd and its 80 percent-owned
subsidiary, Halim Securities Sdn Bhd have entered into a
preliminary agreement with Phillip Securities Pte Ltd of
Singapore to restructure the shareholding of Halim
Securities. The proposed restructuring, to be completed
within six months, would let Halim Securities resolve the
current financial problem of capital inadequacy which has
resulted in it being placed under restricted trading and
the assumption of its trading activities by the Kuala
Lumpur Stock Exchange (KLSE).

In a statement released here Wednesday, Uniphoenix said the  
proposed restructuring would include the transfer of Halim  
Securities's stockbroking license and membership in KLSE to
a newly incorporated company (Newco) to be nominated by
Phillip or Phillip Capital Holdings Sdn Bhd, a Malaysian
associate company of Phillip. Under the proposed transfer,
Uniphoenix should hold 80 percent of the issued and paid up
capital of Newco, of which the paid-up share capital of
Newco should be RM10.00 only, while the remaining 20
percent would be held by the minority shareholders of Halim
Securities.

Uniphoenix said Newco would then issue to Phillip or its  
related corporation (to be nominated by Phillip) of up to
RM60 million convertible preference shares of RM1.00 each.
The preference shares should be convertible into ordinary  
shares of Newco at par value upon the expiry of five years  
from the date of its issuance on the basis of one ordinary  
share for every preference share held. Interest rate on the
preference shares should be agreed by the parties on a
cumulative basis, while the preference shares should carry
full class rights.

Phillip or its related companies also agreed to grant an  
option to the present minority shareholders of Halim  
Securities to purchase up to 10 percent of the preference  
shares on terms and conditions acceptable to Phillip.
Simultaneous with the proposed restructuring, Phillip
should cause Newco to enter into an agreement with Halim  
Securities to assume the liabilites due and owing to its  
remisiers, clients, Securities Clearing Automated Network
Services Sdn Bhd and other statutory bodies, subject to due  
verification and provided that the quantum is agreeable by  
Phillip.

Phillip should also consider to cause Newco to offer Halim  
Securities's other creditors, whether secured or unsecured,
the settlement of Halim Securities liabilities, a lump sum  
payment of a discounted amount to be agreed between
Phillip, Newco and the creditors.

Other terms of the proposed restructuring would involve the  
transfer of the assets of Halim Securities to Newco subject
to terms agreeable to Newco and Phillip would undertake the  
management of Newco in the day to day operations. With the
proposed restructuring, Newco would be able to carry out
its normal business activities of stockbroking.
(Asia Pulse 08-Apr-1998)


P H I L I P P I N E S

ORIENT COMMERCIAL BANK: Rizal Withdraws Rescue Offer
----------------------------------------------------
The Rizal Commercial Banking Corporation (RCBC), one of the
fastest-growing banks in the country, announced today it
was withdrawing its 100 percent offer to buy out the cash-
strapped Orient Commercial Banking Corporation. RCBC is one
of three bidders which expressed interest in rescuing the
Orient Bank from permanent collapse. The other two bidders
include the Philippine Commercial and International Bank
(PCIB) and the Equitable Banking Corporation (EBC).
However, the latter banks failed to push through with their  
plan to post a bid for the acquisition of Orient Bank. They
did not explain their reasons.

Merlyn E. Duenas, the assistant corporate secretary of  
RCBC, said in a disclosure to the Philippine Stock Exchange  
(PSE) that the RCBC offer was not acceptable to the bank's  
satisfaction. But she said that RCBC was reserving its
right to bid anew in the event that the questions that had
arisen were finally resolved. Originally, the RCBC stuck to
its interest of paying only a total of P1.7 billion for
Orient Bank, out of the latter's outstanding obligations of
more than six billion pesos.

This was the amount Orient Bank allegedly incurred when it  
purchased real estate properties in Batangas province in
the hope that prices in the property market would be rise
in the future. However, events turned out otherwise.

The Bangko Sentral ng Pilipinas (BSP) is now trying to work  
out some prescriptive solutions to rescue Orient Bank from  
permanent closure, by hiring professional appraisers to  
appraise the value of all the assets of Jose Go and his  
family. The assets being considered included shopping malls
owned by the Ever-Gotesco Resources Holdings,Inc.
(Asia Pulse 08-Apr-1998)




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., Princeton, NJ USA, and Beard Group, Inc., Washington,
DC USA.  Debra Brennan and Lexy Mueller, Editors.

Copyright 1998.  All rights reserved.  This material is
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