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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 3, 1998, Vol. 1, No. 72

                    Headlines


C H I N A   &   H O N G   K O N G

C.P. POKPHAND: Announcement on Floating Rate Notes
CHEERFUL HOLDINGS: Clarifies Rights Issue Announcement
CHINESE ESTATE: Record Provisions on Punts in Derivatives
CLIMAX INTERNATIONAL: Extension of Time on Agreement
EASYKNIT INTERNATIONAL: Announces Dates for Consolidation
FLOW CHARTING: Winding up Notice
H B INTERNATIONAL: Status Report on Bank Negotiations
MELCO INTERNATIONAL: Reports 80% Drop in Profit
MICHELLE'S BAGS: Winding up Notice
NEW RANK HOLDINGS LIMITED: Winding up Petition
PARAMOUNT PUBLISHING: Announces Reduction of Capital
PEREGRINE INVESTMENTS: Liquidators to Give Report
SING TAO HOLDINGS: Sing Tao and Mingly Continue Discussions
TA FU INTERNATIONAL: Report Delays Due to Auditor's Review


J A P A N  

JUSTSYSTEM CORP: Sony Purchase to Help Restructuring
NIKON CORP: Net Profit Drops 58%


K O R E A

DONGNAM BANK: Interest in Dongnam Bank Merger
KIA MOTORS: Strike by Union Could Affect Ford Deal
KIA STEEL: Court Places Company Under Receivership
PUHEUNG COMPANY: Bankruptcy Filing Approved


M A L A Y S I A

CYGAL BHD: Winding Up Petition
MBF CAPITAL BHD: Posts First Quarter Losses

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

C.P. POKPHAND: Announcement on Floating Rate Notes
--------------------------------------------------
This announcement concerns the meeting held on 29th May,
1998 between representatives of the Company and the holders
of certain floating rate notes issued by the Company and
one of its subsidiaries. Representatives of the Company met
on May 29, 1998 with representatives of the holders of the
1999 Notes, the 2000 Notes and the 2001 Notes. No
resolutions were passed, nor decisions taken, by the
noteholders at the meeting. The noteholders have indicated
that further time is required for them to appraise their
position and that of the Company.

Accordingly, the meeting was, at the request of a majority
of the noteholders, adjourned until 26th June, 1998. At the
date of this announcement, the Company has not received any
writ regarding the aggregate redemption monies with respect
to the 2000 Notes, nor has it received any notice of demand
for repayment from noteholders in respect of the 1999 Notes
or the 2001 Notes.

The Directors confirm that no formal "standstill agreement"
has yet been entered into between the Company and any of
the noteholders, banks and other financial institutions.
The Directors further confirm that there are no
negotiations or agreements relating to intended
acquisitions or realisations which are discloseable under
paragraph 3 of the Company's Listing Agreement.

Further announcements will be made as and when appropriate
in respect of any material developments. In the meantime,
investors are reminded to exercise caution when dealing in
the shares of the Company.


CHEERFUL HOLDINGS: Clarifies Rights Issue Announcement
------------------------------------------------------
In relation to the announcement of Cheerful Holdings
Limited made on 28th May, 1998, the company issued a
clarification on May 29 concerning the latest time for the
fulfillment of the respective conditions of the Rights
Issue and the latest time the Underwriting Agreement may be
terminated by the Manager (on behalf of the Underwriters).

Concerning the Rights Issue, under Clause 3 all the
conditions except sub-clause (v) shall become unconditional
on or before 26th June, 1998 (or any other date as the
Manager and the Company may agree); sub-clause (iv) shall
be fulfilled before the despatch of the Prospectus Document
which is expected to be on or before 26th June, 1998; sub-
clause (v) shall be fulfilled at or before 4:00 p.m. on the
second business day (other than a Saturday) following the
last date of acceptance of, and payment for, the Rights
Shares ("Acceptance Date"), which is expected to be 17th
July, 1998.

In relation to the warning clause under Clause 10 of the
Announcement, the Underwriting Agreement may be terminated
prior to 4:00 p.m. on the second business day (other than a
Saturday) after the Acceptance Date.

The Company also proposed that the Company name be changed
to "Celestial Asia Securities Holdings Limited" subject to
the approvals of the shareholders of the Company, the
Registrar of Companies in Hong Kong and the Registrar of
Companies in Bermuda, and the necessary registration
thereof.

It is not necessary for shareholders and warrantholders of
the Company to exchange their existing certificates for new
certificates bearing the new name to be issued by the
Company.  Further announcement will be made upon the change
becoming effective.


CHINESE ESTATE: Record Provisions on Punts in Derivatives
---------------------------------------------------------
Chinese Estate Holdings has made HK$2.26 billion in losses
and provisions as a result of securities trading in the
year to December. It has revealed that more than half the
losses stemmed from a series of punts in equity
derivatives. According to its upcoming annual report, it
had a net loss of HK$1.16 billion last year on its
securities portfolio and has HK$ 1.61 billion in
derivatives positions yet to be closed.

The HK$2.26 billion in provisions were the largest by a
Hong Kong listed company to date. Rating agency Standard &
Poor`s has placed its BBB minus corporate credit rating on
credit watch with negative implications.

Group financial controller Lam Kwong-wai said HK$2.87
billion was being deposited with its brokers to settle
outstanding derivatives position.  Mr Lam said that the
company`s financial position had not been affected and he
said a further significant loss on its securities portfolio
this year is not likely.  


CLIMAX INTERNATIONAL: Extension of Time on Agreement
----------------------------------------------------
Climax International Company Limited, United Pacific
Industries Limited and Selma Limited announced on 9th and
23rd May, 1998, respectively that they had agreed to extend
the time limit for the fulfillment of a certain condition
stipulated in the Agreement.

Climax, UPI and Selma announced on May 30, 1998, that they
have agreed to further extend the time limit for the
fulfillment of that condition to 3rd June, 1998.

As set out in an announcement made by Climax, UPI and Selma
on 16th April, 1998, Climax, UPI and entered into an
agreement on 10th April, 1998 dealing with a range of
matters affecting Climax and the arrangements between Selma
and UPI. As detailed in the Announcement, a number of the
provisions of the Agreement are conditional on Climax
reaching agreement with its bankers in respect of the
restructuring of the indebtedness of Climax, in terms
acceptable to UPI, within 30 days from the date of the
Agreement. The 30 days period expired on 10th May, 1998.

On 9th May, 1998, the Parties announced that they had
agreed to extend the time limit in relation to the Debt
Restructuring Proposal for a period of 14 days which
expired on 24th May, 1998. On 23rd May, 1998, the Parties
announced a further extension for a period of 5 days which
expired on 29th May, 1998.

The Parties now wish to announce that the terms of the Debt
Restructuring Proposal are still in the process of being
finalised as the consent of one of Climax's bankers is
still outstanding and the Parties have agreed to further
extend the time limit in relation to the Debt Restructuring
Proposal for a period of 5 days expiring on 3rd June, 1998.

Further announcements will be made by Climax, UPI and Selma
as and when appropriate to advise the public of further
developments.


EASYKNIT INTERNATIONAL: Announces Dates for Consolidation
---------------------------------------------------------
Reference is made to the Easyknit International Holdings
Limited announcement dated 28th May, 1998 concerning the
Consolidation Proposal, the Adjustment Proposal and the
Rights Issue.

The Directors wish to clarify on May 29 that the latest
time for lodging transfers of existing Shares with the
Company's branch share registrar in Hong Kong in order for
the Shareholders to qualify for the entitlements of the
Rights Shares should be 4:00 p.m. on Thursday, 2nd July,
1998 instead of on Friday, 3rd July, 1998 as stated in the
Previous Announcement. Accordingly, the register of members
of the Company will be closed from Friday, 3rd July, 1998
to Friday, 10th July, 1998, both days inclusive. The last
day of dealing in Shares on an ex-rights basis will remain
on 30th June, 1998.

Further announcements will be made regarding the details of
parallel trading arrangements in respect of the
Consolidation Proposal and the expected timeable of the
Rights Issue.


FLOW CHARTING: Winding up Notice
--------------------------------
Notice is shown on the Hong Kong Standard of June 2, 1998
that a petition for the winding up of Flow Charting
Investment Limited was presented to the High Court on the
26th day of May 1998 by Tsang Lai Ping of Room 405, 63 Tai
Kok Tsui Road, Kowloon. The petition is directed to be
heard before the Court at 11:00 am on the 8th day of July
1998.


H B INTERNATIONAL: Status Report on Bank Negotiations
-----------------------------------------------------
On May 29 H B International Holdings Limited provided an
update on the current status of the negotiation with banks
for a formal standstill agreement negotiation with
potential investors.

As at 25 May 1998, the outstanding amount due from the
Company and its subsidiaries to the banks is approximately
HK$601 million and the Company is still in negotiation with
the banks with a view to restructuring and extending credit
facilities available to the Group. No formal standstill
agreement has been reached with the banks and the Company
has requested the banks to extend the period for
negotiation for a formal standstill agreement for one month
to the end of June 1998. As at the date of this
announcement, the banks have not replied to the request of
the Company.

As mentioned in the announcement of the Company dated 12
March 1998, the Board is actively seeking external funding
and has received requests from potential investors to
commence due diligence work regarding the business and
affairs of the Group, to which the Company has given its
consent. The Company and the potential investors are still
in discussion and no agreement has been reached at this
stage.

Further announcements will be made by the Company in the
event of any significant development in relation to the
above matters.


MELCO INTERNATIONAL: Reports 80% Drop in Profit
-----------------------------------------------
Melco International Development announced profit generated
by its floating restaurants has dropped 40% this year
compared with the same period last year. Melco is now
running Aberdeen`s Jumbo Seafood restaurant and its two
adjoining restaurants, Jumbo Palace and Tai Pak. It
reported 80% drop in attributable profit last year,
amounting to HK$10.3 million from HK$57 million in 1996.

Chairman Stanley Ho Hung-sun explained the drop in business
to the state of Japan`s not-doing-well economy and fewer
Japanese tourist in Hong Kong.   


MICHELLE'S BAGS: Winding up Notice
----------------------------------
Notice is given on the Hong Kong Standard of June 2, 1998
that a petition for the winding up of Michelle's Bags
International Limited was presented to the High Court on
the 26th day of May, 1998 by Yu Pui Chun of Room 1703, Lok
Tin House, Tsz Lok Estate, Tsz Wan Shan, Kowloon. The said
petition is directed to be heard before the Court at 11:00
am on the 8th day of July, 1998.


NEW RANK HOLDINGS LIMITED: Winding up Petition
----------------------------------------------
As appears on the Hong Kong Standard of June 2, 1998, a
petition for the winding up of New Rank Holdings Limited
was presented to the High Court on the 26th day of May 1998
by Choi Yeung Wing of 2nd floor, no. 6 Wai Yan Street, Tai
Po, New Territories, Hong Kong. The said petition was
directed to be heard before the Court at 11:00 am on the
8th day of July 1998.


PARAMOUNT PUBLISHING: Announces Reduction of Capital
----------------------------------------------------
On May 29, 1998, the Board of Directors of Paramount
Publishing Group Limited announced that it intends to put
forward a proposal to its shareholders for the adjustment
of the nominal value of the shares of the Company by
cancelling paid up capital to the extent of HK$0.80 on each
of the issued shares of the Company and by reducing the
nominal value of all the issued and unissued shares of the
Company from HK$1.00 to HK$0.20 each. The credit of
HK$187,749,382.40 arising from the Adjustment Proposal will
be applied in reducing the Company's accumulated losses
subject to such conditions as the High Court of Hong Kong
may impose.

As at 31st March, 1997, the Company had incurred
accumulated losses of approximately HK$118,424,000 as shown
in its audited financial statements for the year ended 31st
March, 1997. Based on the management accounts of the
Company as of 28th February, 1998, the Company has incurred
a further loss of approximately HK$77,997,000 for the
period from 1st April, 1997 to 28th February, 1998.
Accordingly, the Company has accumulated losses of
approximately HK$196,421,000 as of 28th February, 1998.

The Board considers that the substantial accumulated losses
as of 28th February, 1998 represent a permanent loss of
assets of the Company which was mainly attributable to the
provision for permanent diminution in value of the
Company's investments in subsidiaries. Accordingly, the
Company's issued and paid up share capital is no longer
fully represented by its assets. The Company will be unable
to pay dividends while substantial losses exist. The Board
therefore proposes the resulting credit arising in the
accounts of the Company following reduction of the paid up
capital to the extent of HK$0.80 on each of the issued
shares of the Company under the Adjustment Proposal be
applied in reducing the Company's accumulated losses
subject to such conditions as the Court may impose.

Implementation of the Adjustment Proposal will not, of
itself, alter the underlying assets, business operations,
management of the Company or the interests of the
Shareholders. The Board believes that the Adjustment
Proposal will not have any adverse effect on the financial
position of the Company and its subsidiaries.


PEREGRINE INVESTMENTS: Liquidators to Give Report
-------------------------------------------------
Liquidators for Peregrine Investments Holdings next week
will give the first independent account on what caused the
investment bank's downfall as well as the expected payout
to creditors.

Price Waterhouse`s partner in charge of the liquidation,
David Hague, said he would detail why it failed, what its
liabilities were, how many assets had been recovered and a
payout range for creditors.

The Securities and Futures Commission (SFC) has worked side
by side with the liquidator in the compilation of its own
post-mortem report, which will be used by the Government to
determine whether a comprehensive independent enquiry is
necessary.

The SFC is yet to hand its report to the Government with
resources attributing the delay to the spate of brokerage
collapses in the past five months.

Mr Hague siad he expected the creditor meetings for
Peregrine Derivatives on June 10, Peregrine Fixed Income on
June 11 and Peregrine Investments Holdings on June 12 to
run smoothly. He said an accurate payout rate had yet to be
determined.

The prospect of a clearer picture of events in the months
leading up to Peregrine's collapse comes as Price
Waterhouse has succeeded in selling Peregrine's Philippine
business.

Mr. Hague said negotiations over the sale of Peregrine's
interests in Taiwan and Thailand were continuing. He said
he was "reasonably" confident of realising their sale.

In the past month, Peregrine has received the first of what
is expected to be a number of creditor writs.


SING TAO HOLDINGS: Sing Tao and Mingly Continue Discussions
-----------------------------------------------------------
As reported on the Hong Kong Standard of June 2, 1998, Sing
Tao Holdings and Mingly Corporation said in a joint
statement yesterday that discussions which may or may not
lead to a general offer for the shares of Sing Tao by
Mingly are continuing. Preliminary discussions were also
taking place between Miss Aw, who owns over 50% of Sing Tao
shares, and third parties for a possible sale of part or
all of her shares in Sing Tao.

An earlier agreement for Mingly and Sing Tao chairman Sally
Aw Sian to set up a new company that will buy Miss Aw's
shares has been terminated.

If the agreement had been completed, the new company would
have had to make a mandatory cash offer at $1.76 per share
for the remaining shares in Sing Tao.

Trading in Mingly shares resumes today, while shares in
Sing Tao will remain suspended pending further
announcement.


TA FU INTERNATIONAL: Report Delays Due to Auditor's Review
----------------------------------------------------------
On May 29, 1998, Ta Fu International Holdings Limited
announced that the despatch of the company's annual report
for the year ended 31st December, 1997 has been delayed and
the company now proposes to despatch it on or before 15th
June, 1998. The company's forthcoming annual general
meeting which was originally convened for 23rd June, 1998
(as stated in the notice of annual general meeting
announced on 15th May, 1998) has now been postponed.
Further announcement will be made once the new date for the
annual general meeting has been decided.

Further to the company's announcement dated 25th May, 1998
regarding its liquidity problems, the directors of the  
company wish to review and include further disclosure in
respect of the matters referred to in that announcement.
For this reason, the company's auditors need to review
their report, results for the year ended 31st December,
1997, as published in its announcement dated 15th May, 1998
and the summary of subsequent events to be included in the
Annual Report to see if changes need to be made. The  
company will apply to the Stock Exchange for a waiver from
compliance with paragraph 8(1) and 8(2) of the Listing
Agreement which is, in effect, a request for an extension
of time for despatch of the company's annual report up to
and including 15th June, 1998 and the postponement of the
annual general meeting.

The company's forthcoming annual general meeting, which was
originally convened for 23rd June, 1998 (as stated in the
notice of annual general meeting announced on 15th May,
1998), has now been postponed. Further announcement will be
made once the new date for the annual general meeting has
been decided.

Further announcement will also be made as and when there
are (i) any significant developments in relation to the  
company's on-going discussions with the banks in respect of
a possible debt restructuring proposal or (ii) material
changes in the financial positions of the company and its
subsidiaries or (iii) any matters arising from the
Auditors' Review which are price sensitive in nature.

Investors are advised to exercise extreme caution when
dealing in the securities of the  company.


=========
J A P A N  
=========

JUSTSYSTEM CORP: Sony Purchase to Help Restructuring
----------------------------------------------------
The Nihon Keizai reports on June 2, 1998, that Sony Corp.
said Monday it will acquire a 6.7% stake in Justsystem
Corp. as a way of helping to restructure the leading
Japanese software developer. Sony's purchase of 1.27
billion yen in shares will be issued in July. Justsystem,
the Tokushima Prefecture-based developer of personal
computer applications has also agreed with Sony to jointly
produce software for digital consumer electronics.

Justsystem posted its first-ever net loss for the year
ended March. The results were due mainly to sluggish sales
of Ichitaro, its mainstay Japanese-language word processor.
Pretax loss was 5.19 billion yen on sales of 21.76 billion
yen, down 30.2%. Sony has agreed to provide financial
assistance and management help to restructure the company,
but does not expect to assign directors or managers.


NIKON CORP: Net Profit Drops 58%
--------------------------------
Nikon Corp of Japan said the net profit for the year ended
March 31 fell 58% to 8.32 billion year from 19.4 billion
year for the previous fiscal year. Group pretax profit fell
50% to 17.67 billion yen while sales dropped 1.8% to 372.15
billion yen. The company expects group profit will drop
dramatically further.


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

DONGNAM BANK: Interest in Dongnam Bank Merger
---------------------------------------------
Dongnam Bank, whose non performing loans amount to 293
billion won, or 5.7 percent of its total loans, has
attracted the interest of another bank in Korea. According
to the Korean Times, Kyongnam Bank has allegedly asked
the Korean government to provide 700 billion won in order
to facilitate a merger with Dongnam Bank.  The government
reportedly refused to meet Kyongnam Bank's request due to a
lack of funds.  The Dongnam Bank's capital adequacy ratio
calculated using the standards of the Bank for
International Settlements is 4.54 percent.


KIA MOTORS: Strike by Union Could Affect Ford Deal
--------------------------------------------------
Reuters International reports on June 2, 1998 that labour
unrest at South Korea's Kia Motors Corp could block a
possible deal with Ford Motor Co to increase its stake in
the troubled carmaker, Kia's chairman Yoo Chong-yul said on
Tuesday.

Yoo said Kia's reorganisation plans would be finalised by
the end of July, about a month ahead of schedule. According
to trade minister Park Tae-young, Kia will be put up for an
open international tender. He stressed that a quick
settlement of Kia's troubles was crucial to the country's
economic recovery.

The Korea Times reports on June 2 that Kia Motors' labor
union leaders are expected to face legal action. Yoo Chong-
yul, court-designated chairman of Kia Group, said, "The
management is determined to seek legal action in both civil
and criminal courts against union leaders for their illegal
strike and will mobilize all means available to normalize
operations."

The Kia labor union continued to strike for the second day
at the assembly plants in Sohari and Asan yesterday,
demanding labor stability and a guarantee of their right to
life. The strike was ignited by a labor unionist's attempt
to burn himself to death May 29.


KIA STEEL: Court Places Company Under Receivership
--------------------------------------------------
The Korea Times reports on June 2, 1998 that the Seoul
District Court yesterday ruled that Kia Steel Co. be put
under court receivership, appointing the Korea Development
Bank as court manager. Kia Steel is a subsidiary of the Kia
Group, producing steel products for vehicles. As a result,
four out of five Kia subsidiaries which filed for court
receivership got the court receivership procedure ruling,
except the construction arm Kisan Co.

The court said in the ruling, "Kia Steel has more value in
revitalization than liquidation in view of its scale and
the number of its vendors. It can survive hardship through
court receivership, as financial institutions are expected
to give financial support."

Kia Steel had 1,070.5 billion won total assets and owed
1,394.9 billion won at the end of last year. The steelmaker
filed for court receivership along with its parent Kia
Motors in September last year, failing to endure the
suspension of additional credits by financial institutions
and pressure to repay its loans.


PUHEUNG COMPANY: Bankruptcy Filing Approved
-------------------------------------------
The local court in Seoul placed an announcement in the
Korean language Maeil Kyungje newspaper that it had
approved the bankruptcy filing of the Puheung Company of
345-29 Kasan-dong, Keumchon-gu, Seoul.  The president of
the Puheung Company is Mr. Lee Chung-keun.  


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

CYGAL BHD: Winding Up Petition
------------------------------
Contruction based public listed Cygal Bhd was served with a
winding up petition by Syarikat Lian Ping Enterprise Sdn
Bhd, an interior design company, over a non-payment of
RM3.2million, for interior decorations done in a hotel
under construction in the State of Johor.

The company's application, filed on Jan 27, will be heard
at the Kuala Lumpur High Court on June 9.

The interior designer entered into a contract with Cygal on
April 12, 1996, to do interior fitting-out for suites and
corridors at Grand Bluewave Hotel in Johor Baru for
RM8.3million.

Cygal's paid-up capital was RM47,778,000 of RM1 per share.


MBF CAPITAL BHD: Posts First Quarter Losses
-------------------------------------------
MBF Capital Bhd, a public listed concern with diversified
financial services, announced an 87% drop in group pre-tax
loss to RM116.87 million for the quarter ended March 1998
compared to RM873.23 million loss in the 4th quarter of
1997. Group operating revenue slipped 18% to RM571.24.
Group loss per share slid to 15.0 sen from 97.8 sen in the
previous quarter.


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