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/raid1/www/Hosts/bankrupt/TCRAP_Public/980717.MBXT 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 Friday, July 17, 1998, Vol. 1, No. 103 Headlines C H I N A & H O N G K O N G EMPORIUM GROUP: China Everbright may make provisions GHIASPEED MOTORS CENTRE LIMITED: Winding-up notice HONEST SOURCES HOLDINGS LIMITED: Winding-up notice HOP FUNG STEVEDORES & TRANSPORTATION: Winding-up notice J&A SECURITIES: Investigation into irregularities SING TAO HOLDINGS: Chairman in talks on stake share J A P A N DAIWA SECURITIES: Posts large losses LAKE COMPANY: Negotiating with GE to sell operations LONG TERM CREDIT: Sumitomo to vet LTCB before merger NIKKO SECURITIES: Posts large losses NOMURA SECURITIES: Posts large losses TOMAKOMAI TOBU KAIHATSU KAISHA: Project to be retooled YAMAICHI SECURITIES: Holds Y18 billion in customer assets K O R E A CHO HUNG BANK: Executive under investigation for loans KIA MOTORS CORP: Car makers invited to submit bids MIRABO CONSTRUCTION COMPANY: Starts creditor reconciliation SAMYANG COMPANY: Allowed to start creditor reconciliation M A L A Y S I A EPE POWER CORP BHD: Possible default by associate HO WAH GENTING BHD: Receivership of subsidiary MASTER ALLOY TECHNOLOGIES: Placed in receivership PENSPEN SDN BHD: Voluntary winding-up RJC ENGINEERING SDN BHD: Winding-up petition RIVER PARK SDN BHD: Winding-up petition TRANS CABINS (M) SDN BHD: Winding-up petition WANG ARTOR CREATIVE COMMUNICATION: Winding-up petition WING TIEK: Despite losses, firm determined to stay afloat T H A I L A N D CHAROEN POKPHAND: Thais may sell off retail subsidiaries ESSO THAILAND: Government to sell 12.5% stake ================================= C H I N A & H O N G K O N G ================================= EMPORIUM GROUP: China Everbright may make provisions ---------------------------------------------------- According to the SCMP of July 16, China Everbright has confirmed it may need to make provisions against its investment in department store Emporium Group in Singapore. It said its investment in Emporium was valued at $195 million as of December 31, comprising 3.2 per cent of its assets of $6.1 billion at the same date. Should the judicial managers decide to liquidate Emporium, China Everbright would have to make provisions, which may be less than $195 million. GHIASPEED MOTORS CENTRE LIMITED: Winding-up notice -------------------------------------------------- A notice in the Hong Kong Standard of July 16 says that a petition for the winding-up of Ghiaspeed Motors Centre Limited was presented to the High Court on July 2 by Li King Mui, and the petition was directed to be heard before the court at 9:30 am on July 29. HONEST SOURCES HOLDINGS LIMITED: Winding-up notice -------------------------------------------------- A notice on the Hong Kong Standard of July 16 says that a petition was presented to the High Court on July 3 by Chan Siu Yam for the winding up of Honest Sources Holdings Limited, and the petition was directed to be heard before the court at 9:30 am on July 29. HOP FUNG STEVEDORES & TRANSPORTATION: Winding-up notice ------------------------------------------------------- A notice in the Hong Kong Standard of July 16 says that a petition for the winding-up of Hop Fung Stevedores & Transportation Company Limited was presented to the High Court on July 2 by Fan Chi Ping, and the petition was directed to be heard before the court at 9:30 am on July 29. J&A SECURITIES: Investigation into irregularities ------------------------------------------------- J&A Securities, China's most profitable brokerage firm, was being investigated as mainland financial regulators called two senior executives in for questioning. It was confirmed that top J&A officials, including chairman Zhang Guoqing and president Yang Jun, two of Shenzhen's most prominent financiers, were at the center of the investigation. Officials said they were now also questioning deputy president Kang Xiaoyang and merger and acquisitions department Zhou Zhengkang. Unofficial reports spread quickly yesterday that certain officials were on the run or had embezzled company funds and squirreled them into their own accounts in Hong Kong. There were also rumors former deputy president Gong Hua reported the irregularities to authorities out of spite after he was one of several officials fired in May. Officials offered no formal details of the nature of the allegations but the Shenzhen Securities and Exchange Commission (SEC) and other mainland sources said the investigation might linked to economic irregularities. SING TAO HOLDINGS: Chairman in talks on stake share --------------------------------------------------- According to the SCMP of July 16, shares in publisher Sing Tao Holdings traded heavily yesterday on rumors chairman Sally Aw Sian had stepped up efforts to find a buyer for part or all of her 50.04 percent stake in the company. Ms Aw is believed to be facing cash-flow problems, which prompted her to put the family business up for sale. Jardine Fleming Securities is understood to be advising Ms Aw on the disposal after an original $370 million sale of the stake to property developer Mingly Corp collapsed last month. Sources said Mingly, controlled by pro-Beijing businessman Cha Chi-ming, scrutinised Sing Tao's overall performance and balance sheet, found them unsatisfactory and pulled out of the previous buyout agreement. As a result, it would be difficult to bargain for a price above Mingly's offer of $1.76 per Sing Tao share in late May. Founded by Ms Aw's father 60 years ago, Sing Tao owns Chinese language newspaper Sing Tao Daily, English language daily Hong Kong Standard and 43 per cent of publisher Culturecom Holdings which operates loss-making Chinese language flagship Tin Tin Daily. Meanwhile, Sing Tao confirmed it sold its 51 per cent interest in Shengang Newspaper Publications (Hong Kong) on Monday to state-owned news unit Shenzhen News Publication Centre for an undisclosed amount. Shengang publishes the Chinese language daily Shenxing Times, which has been circulated in Hong Kong and PRC since 1995 under a licence that is one of the key assets of Sing Tao. Sing Tao said a formal agreement detailing the terms of the transaction would be released by October 12. According to the Hong Kong Standard, Ms Aw has confirmed her negotiations with third parties to sell all or part of her 50 per cent stake in Sing Tao. It says that after selling a 51 percent stake in Shengang Newspaper Publications (Hong Kong) to Shenzhen News Publication Centre, which publishes the Shenzhen Special Zone Daily, 49 percent will remain with Sing Tao (China), a wholly owned subsidiary of Sing Tao Holdings. It also says that founded in 1995, Shensing Times is published in more than 20 cities. ========= J A P A N ========= DAIWA SECURITIES: Posts large losses ------------------------------------ The Asian Wall Street Journal reports that Japan's three largest securities firms posted sharp declines in results for the latest quarter due to sluggish trading volume and falling brokerage commissions. These firms are Nomura Securities Co., Daiwa Securities Co., and Nikko Securities Co. Profits of Daiwa tumbled 84% in the April-to-June quarter. Daiwa Securities said its unconsolidated pretax profit tumbled to 2.40 billion yen from 15.32 billion yen, while operating revenue slumped 22% to 62.19 billion yen from 79.62 billion yen. Two of the firms also lost market share amid corporate scandals. Daiwa's share fell to 7% from 9.6%, and Nikko's share sank to 4.8% from 8.2%. All three companies were involved in corporate scandals; Nomura and Daiwa were accused of entertaining Finance Ministry officials suspected of taking briberies, whereas Nikko was punished for improperly compensating a politician. LAKE COMPANY: Negotiating with GE to sell operations ---------------------------------------------------- Kyodo News reports Lake Co. has entered into negotiations with GE Capital Services Corp. of the United States to sell its operations, sources at the Osaka-based consumer loan company said Thursday. Lake, founded in 1964, has fallen into financial trouble due to an increase in problem loans resulting from Japan's economic slump. The company has a workforce of around 2,800 and operates some 510 branches across Japan. Its outstanding balance of loans amounts to 529.5 billion yen. LONG TERM CREDIT: Sumitomo to vet LTCB before merger ---------------------------------------------------- The SCMP of July 16 shows a Bloomberg article which says that Sumitomo Trust & Banking Co and Long-Term Credit Bank of Japan have denied speculation in currency markets that they were planning to cancel a scheduled merger. A spokesman said a committee has been set up for a merger and there is no change in the direction of reaching a basic agreement by autumn. Speculation the merger may not go ahead undercut confidence in Japan's financial system and helped push the US dollar higher. According to the Hong Kong Standard, Sumitomo Trust & Banking said yesterday it would scour LTCB's loan books to make sure only sound assets would be taken over by any combined entity. Chairman of Sumitomo said the bank would judge LTCB's sound assets on its own, based on the outcome of inspections of LTCB currently being carried out by the government Financial Supervisory Agency. He added that they must make the merger successful as the financial world is closely watching the outcome of the merger talks, on whether it could help solve problems in Japan's financial system. The basic scheme would likely to be concluded by the end of September. NIKKO SECURITIES: Posts large losses ------------------------------------ The Asian Wall Street Journal reports that Japan's three largest securities firms posted sharp declines in results for the latest quarter due to sluggish trading volume and falling brokerage commissions. These firms are Nomura Securities Co., Daiwa Securities Co., and Nikko Securities Co. Nikko Securities said its unconsolidated pretax loss widened sharply to 7.39 billion yen from 1.93 billion yen, marking its third consecutive quarter of losses, as its operating revenue slumped 19% to 47.44 billion yen from 58.40 billion yen. Two of the firms also lost market share amid corporate scandals. Daiwa's share fell to 7% from 9.6%, and Nikko's share sank to 4.8% from 8.2%. All three companies were involved in corporate scandals; Nomura and Daiwa were accused of entertaining Finance Ministry officials suspected of taking briberies, whereas Nikko was punished for improperly compensating a politician. NOMURA SECURITIES: Posts large losses ------------------------------------- The Asian Wall Street Journal reports that Japan's three largest securities firms posted sharp declines in results for the latest quarter due to sluggish trading volume and falling brokerage commissions. These firms are Nomura Securities Co., Daiwa Securities Co., and Nikko Securities Co. Profits of Nomura Securities Company tumbled 58% in the April-to-June quarter. Nomura Securities said unconsolidated pretax profit slumped to 14.79 billion yen ($105.7 million) in the April-to-June quarter from 34.93 billion yen, as overall operating revenue fell 17% to 91.22 billion yen from 109.37 billion yen. All three companies were involved in corporate scandals; Nomura and Daiwa were accused of entertaining Finance Ministry officials suspected of taking briberies, whereas Nikko was punished for improperly compensating a politician. TOMAKOMAI TOBU KAIHATSU KAISHA: Project to be retooled ------------------------------------------------------ Yomiuri Shimbun reports the government said a new company will be established to take over a collapsed national development project in Tomakomai, Hokkaido. The existing company operating the project will be liquidated and the losses recovered by forcing financial institutions to abandon their loan claims. The government and the LDP plan to establish the new company with capital of between 40 billion yen and 60 billion yen, to be paid jointly by the central and Hokkaido put up governments. The new company will purchase the plots of land currently owned by Tomakomai Tobu Kaihatsu Kaisha--the joint operation established by the government and private-sector firms operating the project--and will take over its business. The company owes a total of 177.1 billion yen. Out of that amount, 93.1 billion yen is owed to North East Finance of Japan and 84 billion yen to private financial institutions. The company was forced to borrow new funds to meet an interest burden of 8.7 billion yen a year. The existing company will repay loans with the 40 billion yen to 60 billion yen obtained from the sale of the plots and will later go into liquidation. YAMAICHI SECURITIES: Holds Y18 billion in customer assets --------------------------------------------------------- The Nihon Keizai reports Yamaichi Securities Co. still held 18 billion yen in customer assets at the end of June, as about 100,000 customers had yet to request the failed brokerage to return their securities and cash, government sources said. Of the total, 15 billion yen was in stocks and other securities, with the remaining 3 billion yen in cash. Financial Supervisory Agency representatives say Yamaichi may have legal rights to cash after it officially disbands if owners have not replied to notifications. Securities, however, will have to be handed over to the government for safekeeping until the owners turn up. A member of the ruling Liberal Democratic Party voiced hopes that Yamaichi would be allowed to use the remaining customer assets to pay off subordinated liabilities. ========= K O R E A ========= CHO HUNG BANK: Executive under investigation for loans ------------------------------------------------------ The Korean language Maeil Kyungje reports that Mr. Hur Chung-wook, a high-ranking official at Cho Hung Bank is under investigation in relation to the bank's large loan making. Mr. Hur is alleged to have accepted a commission for the bank's decision to lend money to Juriwon Department Store located in a city of Ulsan. Korean banking industry sources said that this may result in a shuffle of Korean banks' top-level management. The bank has been ordered to restructure by the Korean government or face insolvency. KIA MOTORS CORP: Car makers invited to submit bids -------------------------------------------------- According to the Hong Kong Standard of July 16, creditors announced yesterday the opening of the tender for Kia and Asia Motors Corp, urging bidders to submit simultaneous offers by July 24 to acquire at least 51 per cent of stakes in both firms. Invitations will be sent to Samsung Motors, Hyundai Motor and Daewoo Motor, and 20 foreign firms mostly in the US, Japan and Europe. Korea Development Bank governor Lee Keun Young offered to slash the capital of Kia Motors and Asia Motors by 90 per cent and recapitalise them through new rights issues. With Kia's paid-in capital now estimated at 372 billion won, the new issues will raise its equity to 1.5 trillion won. He set the price floor at over the nominal value of 5,000 won a share. Minority stakes would also be auctioned to foreigners. Lee promised to write off debts but said the amount would be unveiled on July 27 before selecting auction winners. MIRABO CONSTRUCTION COMPANY: Starts creditor reconciliation ----------------------------------------------------------- Seoul District Court advertised in the Korean language Maeil Kyungje that Mirabo Construction company has started a creditor reconciliation procedure. The company's address is 228-1 Yongdap-dong, Sungdong-gu, Seoul and the president is Mr. Kim Byung-rin. Creditors have until August 11, 1998 to file their claims. SAMYANG COMPANY: Allowed to start creditor reconciliation --------------------------------------------------------- According to the Korean language Maeil Kyungje's Business Brief section, Samyang Food company and one of its affiliates, Samyang Agriculture and Sea Food Co., were allowed to start a creditor reconciliation procedure by Seoul District Court. =============== M A L A Y S I A =============== EPE POWER CORP BHD: Possible default by associate ------------------------------------------------- EPE Power Corp Bhd, listed in the KLSE, said the scheme of arrangement by Time Engineering Bhd, seeking court protection against creditors, will trigger a default on a syndicated project finance facility taken by an associate of the company, Powertron Resources Sdn Bhd, to finance its power plant in Sabah. Powertron has a syndicated project finance facility of RM330mil. The facility is secured against the shares of Powertron and a debenture on the fixed and floating assets of the company. Powertron is expected to hold discussions with its lender to waive this in the event of a default. HO WAH GENTING BHD: Receivership of subsidiary ---------------------------------------------- Wholly owned subsidiary of Ho Wah Genting Bhd (listed in the KLSE), Master Alloy Technologies (MAT), has been put under receivership and managership by Hong Leong Bank. This arose from a default of RM6,378,533 claimed by Hong Leong Bank. MAT was said to be affected by high interest rates and poor performance in the motor industry. Ho Wah Genting Bhd acquired MAT last year and has since suffered low productivity and high production cost. The default may give rise to a default by Ho Wah Genting as the corporate guarantor for MAT in respect of banking facilities of RM5mil with Oriental Bank. MASTER ALLOY TECHNOLOGIES: Placed in receivership ------------------------------------------------- Wholly owned subsidiary of Ho Wah Genting Bhd (listed in the KLSE), Master Alloy Technologies (MAT), has been put under receivership and managership by Hong Leong Bank. This arose from a default of RM6,378,533 claimed by Hong Leong Bank. MAT was said to be affected by high interest rates and poor performance in the motor industry. Ho Wah Genting Bhd acquired MAT last year and has since suffered low productivity and high production cost. The default may give rise to a default by Ho Wah Genting as the corporate guarantor for MAT in respect of banking facilities of RM5mil with Oriental Bank. PENSPEN SDN BHD: Voluntary winding-up ------------------------------------- The members of Penspen Sdn Bhd on 13/7/98 resolved to wind- up the company voluntarily. Creditors are requested to submit their claims before 17/8/98. RJC ENGINEERING SDN BHD: Winding-up petition -------------------------------------------- Boustead-Johnson Edaran Sdn Bhd on 4/6/98 petitioned for the winding-up of RJC Engineering Sdn Bhd. The petition is directed to be heard on 20/8/98. RIVER PARK SDN BHD: Winding-up petition --------------------------------------- Government of Malaysia on 30/4/98 petitioned for the winding-up of River Park Sdn Bhd. The petition is directed to be heard on 14/8/98. TRANS CABINS (M) SDN BHD: Winding-up petition --------------------------------------------- Cycleworld Corporation Sdn Bhd on 15/6/98 petitioned for the winding-up of Trans Cabins (M) Sdn Bhd. The petition is directed to be heard on 25/9/98. WANG ARTOR CREATIVE COMMUNICATION: Winding-up petition ------------------------------------------------------ R&F Media Services Sdn Bhd on 4/6/98 petitioned for the winding-up of Wang Artor Creative Communication Sdn Bhd. The petition is directed to be heard on 14/10/98. WING TIEK: Despite losses, firm determined to stay afloat --------------------------------------------------------- Wing Tiek Holdings Bhd, a Malaysian building materials company, said it intends to remain afloat as a going concern despite debts. Auditor KPMG Peat Marwick said Wing Tiek is technically insolvent as its shareholder funds would be in deficit if the company didn`t incorporate recent revaluation reserve. The auditor said a loss of 274.3 million ringgit has resulted in current liabilities exceeding current accounts and the depletion of shareholders' funds. According to KPMG, the continuation of Wing Tiek depends on obtaining financial support from bankers and creditors and achieving profitable operations. Wing Tiek said it has obtained a restraining order to prevent its creditors from starting proceedings. The company and its subsidiaries have defaulted on interest and principal payments to financial institutions amounting to 381 million ringgit. =============== T H A I L A N D =============== CHAROEN POKPHAND: Thais may sell off retail subsidiaries -------------------------------------------------------- According to the Hong Kong Standard of July 16, Charoen Pokphand Group and the Central Department Store Group are negotiating with foreign partners for possible sales of retail subsidiaries. The Nation newspaper said Charoen Pokphand was trying to negotiate a sale of its 7-Eleven convenience store chain franchise in Thailand to Taiwan's President Group. It said a deal was expected this month with President likely to buy a 49 per cent stake in a new holding company that would own the franchise in Thailand. The paper also said the Central Department Store Group was negotiating to sell its discount retail chain company Big-C. ESSO THAILAND: Government to sell 12.5% stake --------------------------------------------- Reuters reports the Thai government hopes to raise around $250 million from the sale of its 12.5 percent stake in Esso Thailand, an official at the National Energy Policy Office (NEPO) said on Thursday. The finance ministry was negotiating with potential buyers and expected to conclude the deal by September, the official told Reuters. The ministry purchased its Esso shares for 4.34 billion baht ($105 million) in 1994. Exxon holds the remaining 87.5 percent. The government decided to sell the shares in 1997, preferably back to Exxon. It named J.F. Thanakom and Dresdner Kleinwort Benson as financial advisers. 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 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 to be reliable, but is not guaranteed. The TCR -- Asia Pacific subscription rate is $875 per month delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *