---

    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

             Tuesday, September 28, 1999, Vol. 2, No. 188

                                       Headlines


* C H I N A  &  H O N G  K O N G *

AGRICULTURE BANK: Being created to lessen bad debts            
BANK OF CHINA: Being created to lessen bad debts              
CHINA CINDA ASSET CORP.: Being created to lessen bad debts
INDUST.& COMMERCIAL BANK: Being created to lessen bad debts
INNOVATIVE INT'L HOLDINGS: Posts annual loss
PACIFIC RAINBOW COMPANY: Facing petition for winding up
PACIFIC RAINBOW INDUSTRIES: Facing petition for winding up
PACIFIC RAINBOW INT'L.: Facing petition for winding up
PACIFIC RAINBOW INVESTMENTS: Facing petition for winding up
PACIFIC RAINBOW TRADING: Facing petition for winding up
PALIBURG GROUP: Financially challenged, but aids subsidiary
REGAL GROUP: Financially challenged, but aids subsidiary


* I N D O N E S I A *

BANK BALI: Gov't officials to be interrogated


* K O R E A *

HANBO STEEL: U.S.Steel to visit, participate in purchase?
KOREA FIRST BANK: Facing FSS investigation
SEOUL BANK: Facing FSS investigation


* M A L A Y S I A *

SITT TATT: To raise money for debt-ridden operations


* S I N G A P O R E *

TYE SOON: Posts first-half loss


* T H A I L A N D *

SIAM CEMENT CO.: Cancels share sale to foreign investors
THAI FARMERS BANK: Capital raising may be difficult
THAI MILITARY BANK: Capital raising may be difficult


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

AGRICULTURE BANK: Being created to lessen bad debts            
BANK OF CHINA: Being created to lessen bad debts              
CHINA CINDA ASSET CORP.: Being created to lessen bad debts
INDUST.& COMMERCIAL BANK: Being created to lessen bad debts
-----------------------------------------------------------  
More than 500 big state-owned companies have applied to
swap debt for equity under a programme unveiled in April to
remove the burden of bad debt from the sector.  However,
Beijing is moving cautiously in an effort to prevent bad
debt being shifted from one state account to another.

Beijing is setting up four asset-management companies
(AMC), one for each of the big state banks, to take over
the bad debts. The first, China Cinda Asset Corp, was set
up in April, to handle the debt of the Construction Bank,
and this month has signed agreements to take over debts of
four firms.  The AMCs of the other three big state banks -
Bank of China, Industrial & Commercial Bank, and
Agriculture Bank - are due to be set up before the end of
the year.

More than 500 state firms, with total assets of 358.5
billion yuan (about HK$333.4 billion), have applied to the
State Economic and Trade Commission to join the scheme, the
China Business Times reported.  The commission has selected
89 and forwarded their names to the four big banks for
consideration. They have total assets of 59.6 billion yuan
(about HK$55.6 billion) and long-term debt of 24.8 billion
yuan.

To apply, the firms must be large state firms involved in
priority sectors, must be fulfilling projects and targets
set by the national government and must be firms that their
provincial government considers important enough to turn
around. They must also be losing money.

To be chosen, they must demonstrate that they have
marketable products, a high level of technology, good
management and the potential that they can be turned
around, so that Cinda can in future sell its equity to
foreign or domestic investors, back to the firm or list it
on the stock market.  The last of the four chosen by Cinda,
who signed an agreement with it last Monday, shows the kind
of firm that qualifies.

Jiangxi Guixi Fertiliser Plant started production in
October 1991 with state-of-the-art imported equipment. It
expects sales this year of 442 million yuan, up from 390
million last year.

But, because it was financed by a loan from the
Construction Bank and not a grant from the state and had a
shortage of its own capital, it ran up debts totalling 250
million yuan by the end of last year.  Cinda agreed to turn
debt of 893.6 million yuan into equity, cutting its asset-
liability ratio from 89.25 per cent to 26.38 per cent.

The firm will be reorganised into two parts. A shareholding
company with five shareholders, including Cinda, will be
responsible for the plant's production, while the other, a
limited company, will take over all the assets and staff
not directly involved in production.  (South China Morning
Post  27-Sep-1999)

INNOVATIVE INT'L HOLDINGS: Posts annual loss
--------------------------------------------
Antenna and auto accessories manufacturer Innovative
International Holdings has plunged into the red with a net
loss of $851.01M for the year ended March 31.  The company
made a net profit of $140.02M a year earlier.  It is the
first time for the company to record a net loss.  The loss
included operating loss of $281.71M and exceptional loss of
$610.17M, one-third of which was provision made against bad
and doubtful debts.  Turnover was $378.18M, representing a
42% decline from the same period last year.

PACIFIC RAINBOW COMPANY: Facing petition for winding up
-------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
October 6 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Pacific
Rainbow Company Limited. A notice of legal appearance must
be filed on or before October 5.

PACIFIC RAINBOW INDUSTRIES: Facing petition for winding up
----------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
October 6 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Pacific
Rainbow Industries Limited. A notice of legal appearance
must be filed on or before October 5.

PACIFIC RAINBOW INT'L.: Facing petition for winding up
------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
October 6 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Pacific
Rainbow International Limited. A notice of legal appearance
must be filed on or before October 5.

PACIFIC RAINBOW INVESTMENTS: Facing petition for winding up
-----------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
October 6 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Pacific
Rainbow Investments Limited. A notice of legal appearance
must be filed on or before October 5.

PACIFIC RAINBOW TRADING: Facing petition for winding up
-------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
October 6 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Pacific
Rainbow Trading Limited. A notice of legal appearance must
be filed on or before October 5.

PALIBURG GROUP: Financially challenged, but aids subsidiary
REGAL GROUP: Financially challenged, but aids subsidiary
-----------------------------------------------------------
Paliburg Group and its hotel arm Regal Group have together
injected an additional $2.418 billion into a subsidiary to
complete the development of a Stanley site it won in a
government land auction two years ago.

The aid to Chest Gain comes even as the two major
shareholders are facing financial problems of their own.
Chest Gain was established in June 1997 and won the Rural
Building Inland Lot No 1138 at Wong Ma Kok Road in Stanley.
Paliburg has been selling assets in a move to resolve its
short-term liquidity problems and to restore financial
stability.

The Paliburg/Regal Group said that as of 31 July, their
aggregate advances and other financial assistance to Chest
Gain amounted to $4.778 billion based on the total
available amount of the bank facilities and $4.176 billion
based on the amount of drawndown bank facilities. Paliburg
recorded net losses of $114.8 million for the six months to
June against $609.7 million losses in the same period last
year.

The assistance to Chest Gain was provided in the form of
shareholders' loans in proportion to the respective
shareholding interests of its shareholders.  The advances
are unsecured and have no fixed term of repayment, and
related interest is being accrued at the prime rate. The
capital injection was also made before a provision of
$716.6 million by Paliburg and $537.5 million by Regal for
foreseeable loss in respect of the property development at
the Stanley site

Paliburg, whose controlling stakeholder is Century City
Group, owns 40 per cent of the company, while Regal Group
and China Overseas Land and Development equally share the
remaining 60 per cent of stake.  Of the $2,418.4 million,
Paliburg Group contributed $1,381.9 million while $1.036.5
million was made by Regal Group.  The group said the
capital would be used by Chest Gain to complete the Stanley
site.

These guarantees were provided by Paliburg and Regal on a
several basis in proportion to their respective
shareholding interests in Chest Gain and were given in
respect of the bank loan facilities of $3,300 million made
available to Chest Gain for financing the luxury
residential development project at the Stanley site.
Paliburg is part of the Century City Group, which has said
it will implement a program for orderly disposal of certain
assets in a move to reduce its corporate borrowing and curb
operating losses.  (Hong Kong Standard  27-Sep-1999)


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

BANK BALI: Gov't officials to be interrogated              
---------------------------------------------                 
Prosecutors will today start summoning a senior minister
and 12 others implicated in the politically explosive US$70
million Bank Bali scandal.

"From Monday we will begin the summoning," acting attorney-
general Ismudjoko said. He said the summons "to seek
information" on the case would be issued by Ramelan, the
junior attorney-general.

The latest effort to get to the bottom of the scandal came
after President B.J. Habibie said on Friday he would not
take action against those implicated, as demanded by
parliament, unless courts had found them guilty.  A
parliamentary committee said on Friday it had found seven
government officials suspected of involvement in the
scandal and recommended the seven, including Finance
Minister Bambang Subianto, be suspended immediately until
the case was resolved.

Those named were Mr Subianto; Ahmad Arnold Baramuli,
chairman of the presidential Supreme Advisory Council,
which advises Mr Habibie; central bank governor Sjahril
Sabirin; State Enterprise Minister Tanri Abeng; chairman of
the Indonesian Bank Restructuring Agency Glenn Yusuf, and
his deputies, Farid Haryanto and Pande Lubis.  It also
named six businessmen it suspected of involvement in the
scandal, which centres on a "commission" of more than $70
million paid by the bank to Era Giat Prima (EGP), a private
company with close links to Mr Habibie's Golkar party.

"Only based on court decisions will I take action according
to the authority vested in me," Mr Habibie said.

Mr Ismudjoko said a team to carry out the new round of
investigations into the scandal, which has dragged on
unresolved since July, had already been formed.

"On Friday night I received a phone call from the junior
attorney-general for special criminal offences that he had
formed a team in charge of investigating the Bank Bali
scandal," he said.  "The team is ready to summon
individuals allegedly involved," he was quoted as saying by
the state-owned Antara news agency.  Asked if state
officials would also be questioned, Mr Ismudjoko said:
"Whoever is allegedly involved in the Bank Bali case will
be interrogated."

Economists and Indonesia's main donors have warned that,
unless earnest efforts are taken to tackle corruption, the
foreign funds it desperately needs to make a full recovery
from its economic crisis will be held back.  The
International Monetary Fund has suspended talks on its
bailout instalments to Jakarta, and the Asian Development
Bank has said it will hold up further loans until the Bank
Bali case is cleared up.

The six private-sector figures named by parliament were
former Bank Bali president Rudy Ramli; his directors Rusli
Suryadi and Firman Sutjahja; the owner of EGP, Sugiarto
Chandra; EGP president Setya Novanto, and businessman Kim
Johannes.  Mr Novanto was at the time of the payment deputy
treasurer of the ruling Golkar party, which supports Mr
Habibie.

Bank Bali says the cash was a commission for EGP's help in
recovering money it was owed by three banks that had been
closed by the government.  But officials have failed to
explain why the help of an outside company was required
when the government had already guaranteed to meet the
outstanding debts of the closed banks.  Mr Habibie and
Golkar have denied charges the money was to be partly used
to fund Mr Habibie's bid to return to office in November.  
(South China Morning Post  27-Sep-1999)


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

HANBO STEEL: U.S.Steel to visit, participate in purchase?
---------------------------------------------------------
U.S. Steel, the largest steelmaker in the U.S., is
considering participating in the Nabors consortium formed
to take over Hanbo Steel, an industry source said
yesterday.

A team of eight officials from U.S. Steel is to arrive in
Seoul today to visit the ailing Korean steel firm's plant
in Tangjin, the source said, adding that two more officials
will join the team for inspection for two to three weeks.

"U.S. Steel is sending the team to determine its
participation in the Nabors consortium," the source said.
"Depending on the outcome of the inspection, it may
purchase a stake in the consortium."

Meanwhile, four lawyers representing the Nabors consortium
came to Korea Sept. 12 to resolve legal problems for the
planned takeover.  An official of Hanbo's creditor banks
said that although negotiations with Nabors are being
delayed from the orginal schedule, the two sides will be
able to sit for talks soon because Nabors' plan to take
over Hanbo hasn't changed.  (Korea Herald  28-Sep-1999)

KOREA FIRST BANK: Facing FSS investigation
SEOUL BANK: Facing FSS investigation
------------------------------------------
The Financial Supervisory Service (FSS) has launched an
investigation of Korea First Bank and Seoul Bank, both of
which received government injections of a huge amount of
public funds to normalize their ailing operations, to
determine who is responsible for their non-viable financial
status. A high-ranking FSS official said Monday that it
kicked off a preliminary investigation the same day and
that the main probe will continue for about 20 days
starting from October 4. The official said the
investigation would focus on whether officials of the two
banks had been involved in approving any irregular loans.
(Digital ChosunIlbo  27-Sep-1999)


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

SITT TATT: To raise money for debt-ridden operations
----------------------------------------------------
Sitt Tatt Bhd has proposed rights issue of shares with
warrants attached and rights issue of irredeemable
convertible unsecured loan stocks (ICULS) with warrants
attached.

According to a Sitt Tatt statement, it is to part finance
acquisition of entire interest and properties in Chew Piau
Properties Sdn Bhd and Imacentre Development Sdn Bhd from
Chase Perdana Bhd for RM237mil.  The renounceable right
issues of 138.4 million new shares RM1.30 would be on the
basis of two new shares for each Sitt Tatt share.  For
every two rights issue shares held, the shareholder is
entitled to an allotment of one detachable new warrant in
Sitt Tatt.

The rights issues of RM34.6mil nominal amount of ICULS with
34.6 million detachable warrants is proposed on the basis
of one ICULS for every two existing STB share held. Every
rights issue of ICULS would also be entitled to one
detachable new warrant in Sitt Tatt.  To facilitate the
issuance of new shares pursuant to the proposed rights
issue and proposed acquisition, the company has also
proposed to increase its authorized share capital from the
existing RM100mil to RM500mil by the creation of an
additional 400 million shares.

Sitt Tatt said that upon disposal of its majority stake in
its subsidiary Sitt Tatt Industrial Gas Sdn Bhd, it would
not have any core business that generated revenues. Sitt
Tatt also said that the proposed acquisition was also
expected to improve its financial performance.  It has
incurred losses after tax and minority interest of
RM43.61mil and RM18.86mil for the financial year ended
March 31, 1998 and 1999 respectively.  As at March 31,
1999, Sitt Tatt's current liabilities amounted about
RM44.35mil. (Star Online  27-Sep-1999)


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

TYE SOON: Posts first-half loss
-------------------------------
Automotive parts distributor Tye Soon has slashed its
losses by 92 per cent for the half year ended June 30 to
$285,000 from $3.4 million the same time last year.

The company achieved this through a combination of higher
sales and better margins, a more favourable interest and
exchange rate environment and a lower provision for
doubtful debts, it said.

Turnover rose 31 per cent to $52.9 million, while gross
profits were $2 million compared to a $147,000 loss a year
ago.  But the company saw its tax bill jump to $507,000
from $94,000, though its interest costs fell 36 per cent to
$820,000.  Loss per share fell to 0.12 cent from 1.42
cents. Net tangible asset backing per share also fell to
17.3 cents from 18.1 cents. No dividend was declared.

While the company's automotive components business has
turned profitable, registering a before-tax profit of $0.9
million, its non-automotive business remained loss-making
with a $0.6 million loss in that period, it said.  
(Business Times  27-Sep-1999)


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

SIAM CEMENT CO.: Cancels share sale to foreign investors
--------------------------------------------------------
In a development reflecting uncertainties in international
capital markets, Siam Cement Co. (SCC) informed the Stock
Exchange of Thailand (SET) on Friday of its decision to
cancel the sale of 30 million shares to foreign investors
through a private placement, citing unfavorable capital
market conditions.

Commenting of the news, the J.F. Thanakom president said
SSC's liquidity would not be affected by the cancellation,
but the move could have a negative psychological effect
because the expected capital injection would not
materialize.

Analysts said future trends in international capital
markets would remain unstable and hard to predict as long
as volatile movements in the exchange value of the Japanese
yen and bearish trends in major stock markets prevail.
(Business Day  27-Sep-1999)

THAI FARMERS BANK: Capital raising may be difficult
THAI MILITARY BANK: Capital raising may be difficult
----------------------------------------------------
Thai Farmers Bank (TFB) and Thai Military Bank (TMB) will
encounter difficulties selling new shares abroad because
international markets won't be receptive to capital-raising
activities by Thai companies until the end of the year,
according to Korn Chatikavanij, President of Jardine
Fleming Thanakom Securities.

TMB is getting set for a road show to promote sale of new
shares, first in Thailand beginning this week, and later at
major capital markets abroad. TMB's plan calls for raising
capital from about 1.1 billion baht to 30.6 billion baht.
This will be done by issuing 2 billion new preferred shares
in accordance with the Tier-1 capital assistance plan.

Meanwhile, TFB's postponed international road show is
scheduled to start around October 9 with sessions in
European, US and Asian cities.  TFB aims to sell 1.176
billion capital-increase shares.  Existing shareholders
will be allowed to buy one new share for each share that
they own at a price of 20 baht per share.

A well-informed source told Business Day that there is
considerable discontent among TFB's foreign shareholders,
particularly the Government of Singapore Investment
Corporation (GIC), which bought TFB shares at 88 baht
apiece during the capital increase share sale in 1998.

Since then, the price of TMB's shares has dropped
substantially, closing at 36.75 bahtper share on Friday. In
addition, TFB will not be able to pay dividends to
shareholders until losses are completely eliminated.
TFB suffered a net loss of about 39.88 billion baht in
1998, or about 36.86 baht per share.  The bank reported a
net loss of about 19.41 billion baht, or 16.51 baht per
share, for the first six months of the year.

A source at TFB said the road show will go on despite poor
conditions in world capital markets, adding that TFB's
problems were not severe because a road show was conducted
earlier, and the next one will merely provide additional
data and information.  Meanwhile, an analyst at a foreign
brokerage firm said TMB's share sale may be well received
by foreign investors because the bank offers warrants as a
bonus. However, the analyst said the sale price of the new
shares may not be high - possibly lower than 15 baht
apiece.

Analysts said future trends in international capital
markets would remain unstable and hard to predict as long
as volatile movements in the exchange value of the Japanese
yen and bearish trends in major stock markets prevail.
(Business Day  27-Sep-1999)


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 1999.  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 to be reliable, but is not guaranteed.

The TCR -- Asia Pacific subscription rate is $575 for 6
months 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 ***