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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

             Thursday, October 7, 1999, Vol. 2, No. 195

                            Headlines


* J A P A N *

JAPAN ENERGY CORP.: To post 6-month loss


* K O R E A *

DAEWOO ELECTRONICS: Creditors considering fresh cash
DAEWOO GROUP: Tax office to investigate
DAEWOO GROUP: To hold 2nd meeting with foreign creditors
SAMSUNG GROUP: Tax dodging rumors have company on defensive
SAMSUNG MOTORS: Auto plant to resume operations in 3 months
SEOUL BANK: Gov't aims for foreign management


* M A L A Y S I A *

HAI MING HOLDINGS: Posts 1st quarter loss
TIME ENGINEERING: Big new suitor in the picture


* P H I L I P P I N E S *

INTERPHIL LABORATORIES: Seeks SEC help on min. shareholders
NATIONAL STEEL CORP.: Attracting partners dimming


* S I N G A P O R E *

ROLY INT'L HOLDINGS: Posts annual loss


* T H A I L A N D *

SIAM SYNTECH CONSTRUCTION: Admits bankruptcy filed against
VINAI PHONGSATHORN: To transfer property to pay debt


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

JAPAN ENERGY CORP.: To post 6-month loss
----------------------------------------
Japan Energy Corp. said Tuesday it will post a pretax loss
of 4.5 billion yen in its unconsolidated business for
April-September, rather than break even as predicted in
May.

Japan Energy, a major oil distributor, attributed the loss
to difficulties in shifting price increases on imports of
crude oil to petroleum product prices.  The company also
revised the midterm net account figure downward to a loss
of 6 billion yen, on sales of 640 billion yen, unchanged
from the initial projection.

With the predicted losses, the company decided to cut
executive pay by 20 to 22% and pay for managers in section
chief posts or higher by 3 to 5%.  The company also plans
to draw up a two-year business restructuring plan, major
pillars of which will be measures to cut costs and slashing
about 600 jobs.

For the full fiscal 1999, which ends March 31, the company
expects a pretax profit of 1.5 billion yen and net profit
of 0.5 billion yen on sales of 1,340 billion yen. In May,
Japan Energy projected a pretax profit of 5 billion yen and
net profit of 3 billion yen on sales of 1,310 billion yen.

Meanwhile, the company said it will acquire 4.65 million
issued shares of Kashima Oil Co. for 5,812.5 million yen at
the end of this month from Mitsubishi Chemical Corp., Cosmo
Oil Co. and Tokyo Electric Power Co.  As a result, Japan
Energy will obtain a controlling stake of 53.5%, up from
the current 41.9%, in the Tokyo-based oil refiner.

Japan Energy says it hopes to save a considerable amount in
costs by integrating its own oil refining operations with
those of Kashima Oil. (Kyodo, NewsHound  05-Oct-1999)


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

DAEWOO ELECTRONICS: Creditors considering fresh cash
----------------------------------------------------
Creditor financial institutions of South Korea's Daewoo
Electronics (KSE:07410) will call its steering committee
into session Thursday to discuss additional funding needed
until November, the company's main creditor bank Hanvit
(00030) said Tuesday.

Creditors originally planned to provide US$ 420 million
needed to buy D/A (document against acceptance) and open
letters of credit and 175 billion won, but disbursed only $
150 million in September due to conflicting stances among
creditors.  The committee is expected to discuss funding
support of $ 270 million for October and November as well
as local currency assistance. (Asia Pulse  05-Oct-1999)

DAEWOO GROUP: Tax office to investigate
---------------------------------------
Ahn Jung-nam, head of the National Tax Service (NTS), said
Wednesday that his organization will launch a tax
investigation of the Daewoo business group when the
Financial Supervisory Commission (FSC) hands over related
information on tax evasion allegations against the ailing
group.

Answering questions posted by National Assembly members,
Ahn said that the FSC is currently looking into such
allegations. A National Assembly member asked Ahn whether
the NTS intends to investigate tax reports filed by Daewoo
as the general public has had to shoulder much of the huge
expense stemming from the group's financial crisis. Several
Daewoo subsidiaries are currently in the midst of far-
reaching workout programs.  (Digital ChosunIlbo  06-Oct-
1999)

DAEWOO GROUP: To hold 2nd meeting with foreign creditors
-------------------------------------------------------
Daewoo Group is going to hold the second general meeting
with its foreign creditors within this month to get the
rollover of its $10 billion overseas debts.

With the relationship with its creditors recently being
aggravated by various statements issued by the financial
authorities, Daewoo decided to hold another session with
its foreign creditor banks in Seoul.

"There has been no improvement over the issue of our
overseas debts. We certainly would like to improve the
situation with the group's foreign creditors," said a
Daewoo spokesman. "We still have not confirmed the specific
time and place. But the meeting is likely to be within the
next couple of weeks," he added.

Despite the commitment by the government for treating
Daewoo's foreign creditors on an equal basis, the
international financial community recently repeated their
claim that the local authorities have not delivered on its
promise.  In a statement issued following a meeting in Hong
Kong last week Daewoo's foreign creditors claimed that the
lack of sincerity of the Korean government was shown by the
"adoption without consultation with foreign banks of
critical procedural policies inconsistent with accepted
international workout procedures."

They continued to allege that the government allowed the
grant of preferential security to Korean banks, including
the security pledged by Daewoo chairman Kim Woo-choong, to
favor local institutions only.  The foreign bankers also
criticized the government for excluding them from the
group's workout process, arguing that preferential
treatment was accorded to the claims of Korean investment
trust firms.

Daewoo said earlier that it will allow foreign creditors to
share 4 trillion won ($3.3 billion) worth of collateral
with local banks, in return for a seven month standstill on
its foreign debt until the end of March, 2000.  (Korea
Times  06-Oct-1999)

SAMSUNG GROUP: Tax dodging rumors have company on defensive
-----------------------------------------------------------
The mighty Samsung Group is plunging deeper into hot water
in the face of an escalating controversy over alleged tax
dodging by its chairman's family, watchers said.

Government officials, lawmakers and anti-chaebol activists
have continuously raised suspicions that Chairman Lee Kun-
hee and his children failed to pay gift taxes worth
hundreds of billions of won in the process of wealth
transfers.  But the Samsung bashing is about to get
serious, with the opening of the parliamentary inspection
of the state affairs last week, said the watchers.

On Monday, Minister of Finance and Economy Kang Bong-kyun
said that the government may impose penalty taxes on
Chairman Lee's eldest son, Jae-yong, on charges of tax
evasion.  The next day, officials at the National Tax
Service hinted that the dreaded tax probes will be
inevitable for some Samsung companies to ascertain the
alleged tax-evasion charges by Lee Jae-yong.

Samsung executives now fear that the fallout from the
alleged scandal will fall directly on the "sanctified"
chairman. According to sources, the National Assembly's
Finance and Economy Committee decided to consider summoning
the Samsung chairman and his son to take the parliamentary
witness stand, scrapping their earlier decision not to do
so.

Last month, the three major parties had decided not to
summon the Samsung chairman, apparently giving in to the
group's systematic lobbying.  Citing one instance of
suspected tax evasion by the Samsung family, Minister Kang
said that Samsung SDS was found to have sold its 3.21
million shares to Lee Jae-yong and his three sisters at
7,150 won per share, far below the market prices, earning
them about 22.5 billion won in profits.

"The tax authorities are probing into Jae-yong's case. If
the charges are proven, hefty gift taxes will be levied,"
the minister said. Tax experts forecast that the Lee family
may face at least 10 billion won in penalty taxes,
depending on the results of the probe.

Rep. Kim Young-sun of the opposition Grand National Party
also alleged during a parliamentary session Tuesday that
Lee Jae-yong, now a graduate student, has increased his
wealth by 2 trillion won ($1.65 billion) over the past four
years.

"In 1995, Lee Jae-yong received 6.08 billion won from his
father, paying 1.6 billion won in gift taxes. Thereafter,
he massively expanded his wealth and equity holdings in
major Samsung Group companies to 2 trillion won through tax
evasions and other illegal wealth-inheritance methods," the
lawmaker insisted.

In one instance, Jae-yong bought 3.68 million Samsung Life
Insurance shares at 9,000 won per share, meaning that he
can net at least 2.5 trillion won if the Samsung Life
shares are sold later at a price of 700,000 won per share,
she said.  Similarly, Chairman Lee himself was accused of
raising his stake in Samsung Life from 10 percent to 26
percent this year, using secretly inherited money from his
father and Samsung founder Lee Byung-chul, anti-chaebol
activists said. (Korea Herald  07-Oct-1999)

SAMSUNG MOTORS: Auto plant to resume operations in 3 months
-----------------------------------------------------------
The government and the creditors of Samsung Motor have
decided to allow operations at the firm's Pusan plant to
restart from October 18, following the suspension of
production last December.

A high-ranking government official said Wednesday that the
firm's creditor banks have facilitated the restarting of
production lines by agreeing to provide W20 billion in
operational funding for 3 months, with 6,000 units of
Samsung's SM5 model to be produced in that period. Existing
inventory of about 3,000 SM5 units will be exported to
Saudi Arabia.

If production is to be continued for longer than three
months, there are plans to consider handing over plant
operations to Hyundai Motors. The official said the plan
would be confirmed at a meeting to be held at the Ministry
of Commerce, Industry and Energy Thursday.

Officials at the creditor's group said that although
lenders stand to incur further losses on sales of anything
under 10,000 units per month, they agreed with the proposal
as they could sell the plant for more if it is running.
(Digital ChosunIlbo  06-Oct-1999)

SEOUL BANK: Gov't aims for foreign management
---------------------------------------------
Financial Supervisory Commission (FSC) head Lee Hun-jai
told reporters Wednesday that he hopes Seoul Bank will be
newly managed on a contract basis by a foreign financial
institution or an international consortium.

Lee said that any such parties would be able to participate
in the management of the troubled bank, which was recently
nationalized through a capital injection of public funds,
through a 10-20% equity investment. The government has
reportedly already commissioned U.S. firm Morgan Stanley to
seek out suitable management partners, with a few European
and American firms showing interest.  (Digital ChosunIlbo  
06-Oct-1999)


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

HAI MING HOLDINGS: Posts 1st quarter loss
----------------------------------------
Hai Ming Holdings Bhd has incurred an operating loss after
interest on borrowings, depreciation and amortisation and
exceptional items but before income tax, minority interests
and extraordinary items of RM2.04mil for the first quarter
ended July 31.

The company posted a turnover of RM18.03mil for the period
under review.  Its losses after taxation and extraordinary
items attributable to members of the company was RM1.96mil.
Net tangible assets per share was 50.12 sen.  (Star Online  
06-Oct-1999)

TIME ENGINEERING: Big new suitor in the picture
-----------------------------------------------
The Time Engineering Bhd saga has taken another twist with
the emergence of MCI WorldCom, the second biggest long-
distance telecom company (telco) in US, as a potential
buyer.

A delegation of 10 high-powered MCI WorldCom executives are
currently in Kuala Lumpur to conduct a due diligence study
on Time Engineering at the invitation of the latter,
industry sources told Star Business.  Just over two weeks
ago, three parties submitted their bids to the Corporate
Debt Restructuring Committee (CDRC) to take over in whole
or parts of the Time Engineering operations.  The three are
Maxis Communications Bhd, Singapore Technologies Group and
Kejora Harta Bhd.

"MCI WorldCom is making another round of due diligence
study on Time Engineering's telecoms unit and crown jewel--
Time Telekom. "MCI WorldCom needs the bandwidth, and that
is why it is willing to re-consider Time Telekom again even
though it had backed off earlier because of the huge debts
the company had," the source said.

Time Engineering has debts of about RM4.5bil, with the bulk
belonging to Time Telekom.

"Time Telekom is well positioned to provide good access to
Thailand and Singapore on the back of a comprehensive fibre
optic network which runs along the North South highway and
undersea cable around the country," he said.  "Being a
renown long distance carrier, MCI WorldCom can use Time
Telekom's network to re-route its traffic as Malaysia,
being centrally located in this region, can be a good hub
for them."

But MCI WorldCom and Singapore Technologies were not the
only foreign companies interested in Time Telekom
presently.  Sources said another US-based telco had shown
interest in taking up 30% equity in Time Telekom, but only
after the restructuring of its huge debts.

"With the economic recovery, Time Telekom is also seeing
some growth in its business, more so, with a new managing
director who is pushing hard to sell the company's
services," the source said.  "Given time, and with a
strategic partner which can inject cash into the company,
Time Telekom should be out of the woods, but firstly it
must be allowed to exist."

Time Engineering recently reported a lower group pre-tax
loss of RM136.3mil for the half year to June 30 against
RM264.2mil loss in the 1998 corresponding period. However,
group turnover dropped to RM473.5mil from RM532.8mil
previously.  On the bids submitted by the three parties to
the CDRC, the sources said that the committee will have to
consider the potential of some long distance traffic being
routed via Singapore should Singapore Technologies take
over Time Telekom, thus intensifying competition with
incumbent Telekom Malaysia.

As for Kejora Harta, the sources said that the company,
being property based, would need to source for expertise to
manage Time Telekom should it succeed.  In the case of
Maxis, they observed that Maxis just wanted Time Telekom
without its debt encumberances.  It is believed that Maxis
and Singapore Technologies have submitted bids of between
RM1.2bil and RM1.48bil for Time Telekom, while Kejora is
willing to swallow all of Time Engineering and its debts.
Time Engineering could not be contacted for comments.  
(Star Online  06-Oct-1999)


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

INTERPHIL LABORATORIES: Seeks SEC help on min. shareholders
-----------------------------------------------------------
Interphil Laboratories Inc. has asked the Securities and
Exchange Commission to reject a petition by minority
shareholders to appoint a management committee for the firm
and to have it audited by an independent group to save its
assets.

Company chairman Ricardo Romulo said the minorities' claims
were baseless. Interphil, which produces the products of
Warner Lambert, Novartis, Abbott and Mead Johnson, holds 90
percent of the pharmaceutical market.

Minority shareholders have accused Interphil's management
of signing contracts disadvantageous to the company. They
are said to have hired an accounting firm to inspect the
company's books. The Government Service and Insurance
System and investor Necisto Sytengco lead the minorities.
They have a combined 20 percent equity in Interphil.

Based on the company's latest financial statement, profits
dropped 68.58 percent to P7.65 million last year from
P24.35 million the year before due to higher production
costs, interest and other expenses that grew 34.44 percent
to P85.97 million from P64 million.  Romulo rejected the
minorities' claim that the Zuellig group dissipated
Interphil's assets. He defended the management agreement it
signed with Interpharma Holdings and Management Corp. as
fair and beneficial to it.

This is the second time Romulo has had to cross swords with
minority shareholders. At Sime Darby Pilipinas Inc, where
he is chairman, a minority shareholder has questioned the
board's decision to invest nearly two-thirds of the
company's money in Le Refrigeration, a London-based firm.
(Manila Times  06-Oct-1999)

NATIONAL STEEL CORP.: Attracting partners dimming
-------------------------------------------------
The National Steel Corp. (NSC) is not likely to get new
partners as prospective investors would rather await its
foreclosure and buy the firm or parts of it at a bargain
than take it now at a higher price tag, industry sources
said.

This is because some aspects of NSC's plant operations are
not attractive to buyers like the billet shop that produces
raw materials for long steel products, said the sources who
refused to be named.

"There's no more hope for the billet shop which is a
'scratch' for investors," the sources added, noting most
investors that negotiated to buy the company used the non-
viability of the billet shop to haggle for lower offers.

NSC has debts of up to 14 billion Philippine pesos (PhP)
(US$346 million at PhP40.394:US$1). The consortium of 14
creditor banks have already warned the company of
foreclosure after the steel firm stopped paying obligations
a few months back.  Company officials earlier requested
that banks give the firm more time to conduct negotiations
with investors that could infuse fresh capital and help
rehabilitate ailing operations in Iligan City.

Among foreign investors reported to have engaged in talks
with NSC were Ispat International of Kuwait and Malaysia-
based Dupherco. NSC has not reported any positive
developments from said talks. Industry sources said the
talks failed mainly because of investors' "refusal to buy
the company lock, stock, and barrel."

Most investors are interested only in NSC's production of
flat products like hot-rolled coils, cold-rolled coils, and
tin plates "because they believe something can still be
done to improve viability of these specific operations,"
the sources said.  At the moment, investors have been
unable to successfully negotiate for a piecemeal purchase
of NSC assets or a bargain price for the entire company.

"Investors are wise enough to wait for the company to
eventually fall to pieces, expecting that when this
happens, the firm and its creditor banks will be under
pressure to soften their stand in the negotiating table,"
said the sources.

NSC is formerly controlled by the government before
Malaysian firm Wing Tiek Holdings Berhad in 1995 bought
82.5% of the company with a promise it would infuse fresh
capital to modernize operations.  Wing Tiek later sold the
shares to Hong Kong-based Hottick Investments Ltd. in 1997
and, until now, there has been no significant new
investments made to rehabilitate the company, government
officials observed.

NSC officials have blamed the company's financial loss to
the entry of allegedly dumped competing goods in the
domestic market, particularly steel products coming from
Russia and Ukraine where there is reportedly surplus
production.  (Business World  06-Oct-1999)


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

ROLY INT'L HOLDINGS: Posts annual loss
--------------------------------------
For the year ended April 30, 1999, Roly International
Holdings' net loss stood at some US$34.6 million on a
turnover of US$234.1 million.  The company's US and Europe
operations contributed close to half of the group's
revenues last year.

Mr Wang said he expected revenues to fall by about 45 per
cent this financial year but the company will make a
profit, compared to a loss previously that worked out to
loss per share of 10.7 US cents.

Roly expects to swing back into the black this year after
two straight years of losses.  "After we cut our loss-
making entities, we are very confident that we will make a
profit this year," deputy chairman Wang Lu-Yen told BT
yesterday.

Last month, the mainboard-listed company divested its loss-
making subsidiaries in the US and Europe for US$30.9
million (S$52.1 million) to focus on its Asian operations.
"Moving forward, the earnings per share will be attractive
and any profits will benefit our shareholders."

Roly's two units, Linmark Westman Group and iHomedecor.com,
will seek separate listings next year, Mr Wang said. "We
are looking at a listing in Nasdaq for iHomedecor by mid of
next year."

Linmark is likely to list on an Asian bourse.  During the
year, Roly acquired Linmark for about US$10 million and Mr
Wang is confident of breaking even within two years.

"Linmark will be our biggest contributor in terms of
profit," he said. "We are going to be very aggressive with
Linmark."

Linmark raked in a net profit of US$2.6 million for the
first half year.  Roly has a 35 per cent stake in
iHomedecor, a start-up e-commerce site retailing lifestyle
goods.  Its annual turnover is expected to hit US$500
million in financial year 2002.  Mr Wang said iHomedecor
enjoys high margins of up to 50 per cent despite giving
consumers a 40 per cent discount off retail prices.

Roly has also earmarked some US$2 million to build "a world
class Web site" which will be completed in mid-2000.  Last
month, Roly was appointed exclusive distributor for US
toymaker Mattel's products in China for five years. "We can
make sure on this venture, we won't lose any money," Mr
Wang said. "We are looking at US$1 million in revenues for
the first 12 months."

Roly has two Mattel stores in China and more retail outlets
are in the pipeline, he said. The company is also not
ruling out further acquisitions to "synergise and
contribute to our bottom line".  Mr Wang's most pressing
task is to turn the company around and account to
shareholders.

"I need to focus on building the fundamentals, strengthen
the company's income and build up our Web sites," he said.
"I've got over 7,000 shareholders to account to."  
(Business Times  06-Oct-1999)


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

SIAM SYNTECH CONSTRUCTION: Admits bankruptcy filed against
----------------------------------------------------------
Siam Syntech Construction Plc acknowledged that Nakornthon
Leasing Co Ltd had filed a bankruptcy case against the
company for failing to repay Bt46 million of debts, mainly
incurred from leasing construction machinery.

The Central Bankruptcy Court has scheduled the first
hearing for November.  The company has, however, insisted
that it still has the capability of repaying the debts as
it has several projects under construction.  Siam Syntech
earlier landed a Bt3.9-billion contract for police
apartment buildings, and a Bt1.6-billion contract to
construct a building for the Industrial Finance Corporation
of Thailand.  (The Nation  06-Oct-1999)

VINAI PHONGSATHORN: To transfer property to pay debt
----------------------------------------------------
Pacific Assets Plc (PA) has said it will accept only debt-
free assets if Vinai Phongsathorn of Preawa Co wants to
transfer property to repay a 161.77 million baht loan from
the firm.

Mr Vinai, who is former managing director of PA, said he
will submit the loan repayment proposal to PA this week.
It has been reported that Mr Vinai intends to transfer
1,000 square metres of office space at Silom Centre to
repay the loans Preawa Co acquired from PA, but it is
believed that the office space is included in a list of
asset seized by the Financial Sector Restructuring
Authority (FRA).

"We welcome all loan repayment options but we have as our
main criteria that we can't accept the transfer of assets
with debts attached. However, we are still waiting for a
written proposal from Khun Vinai," said Alex Ho, PA's new
chief executive.

After the proposal is submitted, PA will consult its
directors to determine what steps will be next. This will
include a valuation of proposed assets.

"The loan settlement is on the horizon and I have positive
feelings about the Preawa issue as it is expected that the
loan will be resolved before the year-end," he said.

Mr Ho said that after his three-month period at PA he has
as a priority reassessing and refocusing the company's
internal operations and then determining what other changes
are needed. Transparency in all areas from accounting to
procedures is very important to strengthen PA's core
business in hotels, offices and serviced apartments.
The company is now dealing with funds from Singapore and
North America which may subscribe to the remaining 29.26
million shares at 20 baht each on November 15.

Mr Ho said having a wide range of shareholders will benefit
the firm in terms of different sources of funds. The firm,
with 3.3 billion baht in registered capital, has Wing Thai
Group International as the biggest shareholder with an
18.71% stake.  After the company is fully recapitalised to
3.5 billion baht, foreigners will be able to hold up to 49%
of the shares.  The company is looking for new business.  
(Bangkok Post  06-Oct-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
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