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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, June 8, 2000, Vol. 3, No. 111

                                       Headlines


* A U S T R A L I A *

AMP GROUP: To review banking arm ops, restructuring
EISA: Suspended firm has two options -- sink or merge
MARY RYAN COFFEE AND BOOK STORE: Old chain in receivership
MUSEUM OF CONTEMPORARY ART: Mayor may become saviour


* C H I N A  &  H O N G  K O N G *

PAM & FRANK INT'L HLDGS.: Rehab progress given to HKSE
WAH KWONG SHIPPING HLDGS.: Buyout of loss-maker proposed


* I N D O N E S I A *

BANK BALI: Accusations fly as dispute worsens
PT BDNI CAPITAL: 60% of creditors agree to restructuring


* J A P A N *

LTCB YOMIURI: Reopens as Shinsei Bank
NIPPON CREDIT BANK: Softbank strikes deal to buy it


* K O R E A *

HYUNDAI MOTORS: Secession from parent group likely delayed
KOREA MERCHANT BANKING CORP.: Deposit decline forboding
NARA BANKING CORP: Deposit decline forboding
YEUNGNAM MERCHANT BANKING CORP.: Deposit decline forboding


* M A L A Y S I A *

BESCORP INDUSTRIES BHD.: Shortlists three white knights
LINKEDUA BHD.: Restructures 965.2M rgt in loans
TIME ENGINEERING BHD: Gets another reprieve from creditors


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

DAO HENG BANK: To give up license after merger
RURAL BANK OF SAN MIGUEL: PDIC servicing its clients
URBAN BANK: Top brass face DOSRI charges
VICTORIAS MILLIONG CO.: Mancom opposes rehab alternative
WESTMONT INVEST.CORP.: Defying SEC's cease & desist order


* T H A I L A N D *

BANGKOK TRANSIT SYSTEM: Struggles to keep from insolvency
SAHAVIRIYA CITY: Survives bankruptcy cases


=================
A U S T R A L I A
=================

AMP GROUP: To review banking arm ops, restructuring
---------------------------------------------------
AMP has launched a review of its yet-to-be-proven banking
arm to ensure it has some relevance as the financial
services group seeks to lift its recent disappointing
performance.

Outlining a fresh focus on freeing capital and improving
shareholder returns, AMP chief financial officer Marc De
Cure said AMP was looking "very closely" at the banking
operation.  He reiterated that AMP was not a believer in
the "bancassurance" model.  He also outlined a more
aggressive focus on cutting debt by restructuring and
recognising for the first time that only by exceeding its
cost of capital could the group add value.

Broking analysts believe AMP faces a year of consolidation
and only modest growth above last year's $1.05 billion pre-
abnormal net profit.  However, some analysts are
forecasting growth to between $1.4 billion and $1.5 billion
in 2001.

"The issue with the bank is it's got to be the key to AMP's
strategy of helping customers with wealth creation and
income protection," Mr De Cure said.

This is expected to involve outsourcing some banking
functions to bring the bank into line with AMP's broader
plan to be a "selective product manufacturer."  AMP Banking
generated a $48 million loss in 1999, in line with
management expectations following its launch in June 1998.
Since its launch, the bank has been offering mortgages,
credit cards and deposits, but Mr De Cure said credit cards
were not a high margin business.

"The point of the bank is to provide the complete solution
so people can switch between investment products," he said
after speaking to a select group of investors at a UBS
Warburg investment conference yesterday.  "I think
mortgages are clearly linked to that strategy because
mortgages are a key part of wealth creation," he said.

Yesterday's briefing was designed to further clarify the
group's strategy as it seeks to overcome the sour taste
from last year's GIO Australia takeover debacle. Mr De Cure
signalled there was no intention to raise capital "in the
short term" and the group's immediate imperative was to
increase return on equity from 12.9 per cent to more than
15 per cent.

He said $95 million in synergy benefits from the
acquisition of GIO had been achieved, suggesting AMP's
target of $140 million within two years is likely to be
exceeded.  AMP shares rose 20 cents to $16.35, having
recovered from under $15 before last month's heated annual
general meeting.  At the meeting, managing director Paul
Batchelor came under fire for his options package and his
involvement. (The Age  07-Jun-2000)

EISA: Suspended firm has two options -- sink or merge
-----------------------------------------------------
Beleaguered Internet service provider Eisa yesterday
suspended its securities from trade, fuelling speculation
the company is either about to collapse or be bought.

Eisa chief executive Mr Damien Brady is believed to be
working on the sale of several assets from the business and
the company yesterday said an announcement was "pending".
Shares in eisa have been subject to a trading halt since
last Friday when they slumped to just 24.5c, more than 92
per cent off a high in February of $3.18.

An ASX spokesman said although suspensions had no set time
limit - trading halts can last no longer than 48 hours -
the exchange would prefer eisa "made an announcement sooner
rather than later."

With only about $1 million of cash left in its coffers and
no guarantee of receiving a refund of the $20 million
deposit it paid on the now-aborted purchase of OzEmail,
market watchers said eisa's options were limited.

"It's fair to say there's a high level of certainty that
there are only two possible outcomes," one analyst said
yesterday. "Eisa will either be bought or wound up."

Rumoured to be looking at buying the ISP, now worth about
$18 million, down from $191 million four months ago, are
Cable & Wireless Optus, AAPT and One.Tel as well as
telecoms software provider Open Telecommunications.
However, sources close to negotiations said yesterday that
Open "had its hands full doing what it does already".

While Eisa's image has taken a battering in the past week,
it is understood its major asset - a customer base of
80,000 and Internet exchanges around Australia - has
remained intact and is worth somewhere between $50 million
and $100 million.  Eisa's possible saviours are also
rumoured to be OzEmail's suitors.

UUNet, OzEmail's parent, announced last week it no longer
planned to sell Australia's second largest ISP to eisa. It
is believed OzEmail will now be bought by a telecom
company.  Mr Sean Howard, OzEmail founder and recently
appointed Optus non-executive director, is rumoured to be
interested in buying back the ISP he sold to WorldCom for
$520 million in December 1998. However, Mr Howard yesterday
rejected suggestions he was involved in a takeover bid for
OzEmail with venture capital firm Allen & Buckeridge. Mr
Roger Buckeridge also rejected any involvement with Optus
or Mr Howard.

Mr Howard also declined to comment on behalf of Optus.
Sources close to the two companies also denied market
rumours that eisa founder Mr Johnson Wang had returned to
Sydney this week. Mr Wang, who owns 58 per cent of eisa,
was reported last month to have returned to China to build
a "bigger and better business" there.

Meanwhile WorldCom, UUNet's parent, said it had no
intentions of spinning off UUNet to win regulatory approval
for the $US143 billion ($246 billion) purchase of Sprint.
UUNet is WorldCom's crown jewel, with an estimated $US3.5
billion revenue in 1999.  WorldCom's purchase of Sprint has
come under regulatory scrutiny in both the US and Europe.
Last month US Justice Department staff recommendation urged
the takeover be blocked. (Sydney Morning Herald  07-Jun-
2000)

MARY RYAN COFFEE AND BOOK STORE: Old chain in receivership
----------------------------------------------------------
Cash flow problems have been blamed for the appointment of
receivers to the Mary Ryan coffee and book store chain.
PricewaterhouseCoopers  has been called in by National
Australia Bank to run the chain.

The business, which has been going for 20 years, has 10
stores throughout south-east Queensland which will continue
to trade pending a sale.  Director, Phil Ryan, says he is
devastated by the move against the Mary Ryan chain, given a
restructure plan was put to the National Australia Bank.

"The report that we gave to the bank was by one of the best
retail restructuring firms in the country," he said. "It
was positive and yet the bank rejected it so, you know,
obviously they've had this lined up for quite some time.
They were going to make a move no matter what plans and
things we were going to offer them." (ABC News Online  07-
Jun-2000)

MUSEUM OF CONTEMPORARY ART: Mayor may become saviour
----------------------------------------------------
The Lord Mayor of Sydney, Councillor Frank Sartor, re-
emerged yesterday as the favourite to become the saviour of
the beleaguered Museum of Contemporary Art.

The Premier announced last night that the State Government
was on the verge of clinching a deal with Sydney City
Council over management of the Circular Quay operation.
Mr Carr told a budget estimates hearing he was "close to
concluding a memorandum of understanding" with Cr Sartor,
to cover the continuing costs of the museum and fund its
expansion.

The Premier said he was "looking fairly kindly" on the Lord
Mayor's bid, confirming speculation that the Sydney Harbour
Foreshore Authority is no longer a contender to become the
museum's new landlord.  According to one museum source, the
authority's chairman, Mr Gerry Gleeson, has withdrawn from
the race so as not to be in "conflict with the Premier".

"He [Gleeson] is smart enough to know when to retreat."

Sydney City Council has amended its original $59 million
rescue bid for the museum to make it attractive to the
State Government.  The new plan eliminates the $14.5
million contribution needed from the State Government to
help meet the cost of the museum's refurbishment and the
construction of a moving pictures museum and a small cinema
complex.

Cr Sartor has agreed to raise the extra $14.5 million
through corporate donations.  The Premier has insisted any
bail-out of the MCA should not involve taxpayers' money
following its $750,000 injection to the museum last August.
Cr Sartor is understood to have met the Premier in the past
week to thrash out final details.

The harbour authority has consistently declined to comment
on its position, but if it has withdrawn its bid, it puts
the onus on the Town Hall and the Government to negotiate a
compromise with the University of Sydney.  The university,
the parent body of the MCA, holds a 39-year lease for the
Government-owned MCA building and has more than $6 million
in loans to the MCA. As a result, questions remain about
just how legally binding a memorandum of understanding
could be if the university was not a signatory.

The university's Vice-Chancellor, Professor Gavin Brown,
said last night: "Any option requires the co-operation of
the university and we are honestly committed to the future
of the MCA."

It is believed negotiations with the university have been
left to Premier's Department head, Dr Col Gellatly. The
university has opened its own negotiations with the
National Gallery, in Canberra.  A report by accountancy
firm Deloitte Touche Tohmatsu found the MCA faces a "worst
case" budget deficit of $1.8 million by the end of the
year.

The report predated the museum's signing of a new
sponsorship deal in which telstra.com is underwriting the
cost of free public entry for a year from May 26. Mr Carr
last night reconfirmed his commitment to a Museum of
Contemporary Art at its current location. It was
"appropriate" a museum "devoted to the contemporary
imagination" should be in Sydney. (Sydney Morning Herald
07-Jun-2000)


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

PAM & FRANK INT'L HLDGS.: Rehab progress given to HKSE
------------------------------------------------------
Pam & Frank International Holdings Ltd., through Tsui Lai
Ping, Director, has reported to the Hong Kong Stock
Exchange that the hearing of the Petition scheduled on 5th
June, 2000 was further adjourned until 29th June, 2000.
A winding-up order may be made against the Company as a
result of which the Company will become liquidated.
Shareholders and investors of the Company are advised to
exercise caution when dealing in the shares of the Company.
Negotiations regarding the group restructuring are still in
progress.

Dealings in the securities of the Company on the Stock
Exchange were suspended with effect from 10:00 a.m. on 5th
June, 2000 at the request of the Company. The Company has
applied to the Stock Exchange for the resumption of
dealings in its securities with effect from 10:00 a.m. on
7th June, 2000.

The Board (the "Board") of Directors of Pam & Frank
International Holdings Limited ("the Company") refers to
the announcement (the "Announcement") of the Company dated
31st May, 2000 in relation to a winding-up petition (the
"Petition") made by Li Mei Trading Co. ("Lei Mei") against
the Company. Terms defined in the Announcement shall have
the same meaning when used herein unless the context
requires otherwise.

The Board wishes to advise on the progress of the group
restructuring. Further negotiations with an independent
third party regarding the group restructuring (as disclosed
in previous announcements dated 21st January, 2000, 18th
February, 2000, 30th March, 2000, 10th April, 2000) are
continuing and no legally binding agreement has been
reached.

However, the Company was informed on 19th May, 2000 that
such independent third party had made an offer to the bank
creditors (the "Bank Creditors") of the Company to acquire
HK$55 million of the debts of the Bank Creditors due from
the Company and as at 5th June, 2000, in-principle consent
had been obtained from all of the relevant Bank Creditors.

However, no legally binding agreement has been reached in
relation to the debt of the Bank Creditors until execution
of the formal documentation (the "Deed"), which is expected
to be finalised by or around 8th June, 2000. No legally
binding agreement has been reached between the Company and
such independent third party on the Company's repayment of
such debts.

Further announcement will be made when there is material
progress on the Petition and the group restructuring,
including the execution of the Deed. (Hong Kong Stock
Exchange  07-Jun-2000)

WAH KWONG SHIPPING HLDGS.: Buyout of loss-maker proposed
--------------------------------------------------------
Two majority shareholders have offered to buy out Wah Kwong
Shipping Holdings, one of Hong Kong's oldest listed
companies, in a move that would result in delistings
locally and in London.

George Chao Sze-kwong, president of Wah Kwong, and CMB, a
shipping company based in Belgium, have proposed buying for
HK$427 million the remaining 57.7 per cent of shares they
do not own from shareholders.  The offer is HK$5.65 a
share, valuing Wah Kwong at HK$723.5 million. The offer
represents a 17.7 per cent premium to the company's last
closing price on May 31.

However, Wah Kwong has a net-asset value of HK$1.45
billion, or HK$11.37 per share.  This means Mr Chao, who
holds 15.2 per cent of Wah Kwong, and CMB, which owns 27.1
per cent, will acquire the shares at less than half their
net-asset value.  Still, the offer would be the highest
price the counter has seen in two years.

Wah Kwong, listed in 1973, is not an active counter. Only
15,000 shares have changed hands daily since the beginning
of the year.  Mr Chao and CMB said yesterday they had
secured irrevocable agreements from two majority
shareholders, Rosanna Gaw and Li Kwok-yin, to sell their
holdings of 23 per cent and 9.7 per cent.

Mrs Gaw, who bought a portfolio of stocks including Wah
Kwong from Pioneer Industries last year, could cash in
HK$166 million from the sale of her stake.  Wah Kwong has
not posted a profit since 1998.  The company had a loss of
HK$58.9 million in the year to March 31 last year. The loss
widened to HK$79.1 million in the first half to September
30 last year.

In a statement to the stock exchange, Mr Chao and CMB said
the company's business and management structure would
remain intact after the delisting.  Jardine Fleming will
represent Mr Chao and CMB in the proposed buy-out, while
Anglo-Chinese will act for Wah Kwong.  Wah Kwong is to
resume share trading today.  (South China Morning Post  07-
Jun-2000)


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

BANK BALI: Accusations fly as dispute worsens
---------------------------------------------
Syahril Sabirin, Indonesia's central bank governor, on
Tuesday accused President Abdurrahman Wahid of trying to
force him to resign in a deepening dispute over a banking
scandal.

Mr Sabirin was named on Monday as a suspect in an official
inquiry into the Rp900,000bn ($106.3bn) Bank Bali scandal,
in which more than $80m of bank recapitalisation funds were
channelled into a politically connected finance company
last year.  He claimed both the president and Marzuki
Darusman, attorney general, had threatened in several
meetings since December that he would be named if he did
not step down.

But Mr Sabirin was adamant that he would not step aside
over the inquiry. "I will not resign under pressure, not as
though I was guilty," he said.

Yushar Yahya, a spokesman for the attorney general, said on
Monday there was evidence linking Mr Sabirin to the Bank
Bali scandal.  The finance company involved had links to
the ruling Golkar party and to officials close to BJ
Habibie, then Indonesia's president.  Achjar Iljas, deputy
governor of Bank Indonesia, the central bank, said the move
"could be interpreted as interference" with its
independence.

He said the bank would consider reporting both the
president and the attorney general to the police over a
breach of the 1999 law on central bank independence.
A spokesman for the president said that "it is far-fetched
to call the attorney general's inquiry politically
motivated."

The dispute comes amid concern in the financial markets
over Indonesian politics, which has driven the rupiah and
the Jakarta composite index to eight-month lows in recent
weeks.  Investors have blamed the corrosion of the exchange
rate on political uncertainty under Mr Wahid's rule.

Mr Sabirin was appointed by former President Suharto in
February 1998 at the height of the Asian financial crisis.
Mr Wahid was elected president in October 1999 on a mandate
promising to restore political unity and speed up economic
recovery.  A new law on the independence of the central
bank, tabled last year, separates the position from
presidential control.

The central bank governor can now only be dismissed by
parliament in the event of illness, corruption, or
voluntary resignation.  Parliament has been divided over Mr
Sabirin's role in the attorney general's inquiry,
reflecting Indonesia's fractious coalition politics.
(Financial Times  06-Jun-2000)

PT BDNI CAPITAL: 60% of creditors agree to restructuring
--------------------------------------------------------
PT BDNI Capital said creditors holding 60 pct of its debt
have agreed to a restructuring, which is to involve a
haircut, rescheduling and conversion of debt into equity,
Bisnis Indonesia reported.

"Of the total debt of 103 mln usd, a majority of the
creditors, representing 60 pct of the loans have in
principle agreed to the restructuring scheme," the report
said, citing a company statement.  (AFX News Limited  06-
Jun-2000)


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

LTCB YOMIURI: Reopens as Shinsei Bank
-------------------------------------
Shinsei Bank opens after rising from ashes of defunct LTCB
Yomiuri. The Long-Term Credit Bank of Japan, which went
bankrupt in 1998 and was sold to a U.S. investment group,
renamed itself Shinsei Bank and reopened for business
Monday.

Since this is the first time that a bank temporarily
placed under state control has reopened, Shinsei Bank is
being viewed as a model for reconstruction of collapsed
banks such as Nippon Credit Bank and Kofuku Bank. Shinsei
Bank aims to evolve from a long-term credit bank, which
extends loans to large companies by raising funds through
bank debentures, into a regular bank. The bank is likely to
achieve its aim by focusing on individual banking and
investment banking, such as securities dealing.

The bank has already targeted individual customers
by increasing the number of investment incentives and
issuing a combined cash-credit card. At Shinsei's
headquarters in Chiyoda Ward, Tokyo, a new signboard
advertising the bank was unveiled shortly before 9 a.m,
when the doors were opened to customers.

Masamoto Yashiro, chairman of the bank, sent an e-mail
message to employees promising that he would manage the
bank by looking five years ahead to envisage the financial
situation of the future. He wrote that merely keeping pace
with the changes in society was not enough to gain an
internationally competitive edge. LTCB collapsed in October
1998 with huge bad loans and was put under government
control.

However, New LTCB Partners CV, a U.S. investment
consortium, which bought LTCB and restarted operations on
March 2 with a new management team. (The Yomiuri
Shimbun/Daily Yomiuri  06-Jun-2000)

NIPPON CREDIT BANK: Softbank strikes deal to buy it
---------------------------------------------------
Softbank Corp has reached agreement with the Japanese
Government to buy failed Nippon Credit Bank (NCB), enabling
it to break into Japan's tightly protected banking world.

The takeover by the Internet investor marked the first time
a non-financial firm had taken a foothold in the struggling
banking sector and set the stage for a dramatic shift in
financial services from "old Japan" banks to innovative and
more nimble outsiders, analysts said.  Analysts said,
however, the expansion could push Softbank too far from its
core business.

Financial Reconstruction Commission (FRC) head Sadakazu
Tanigaki said: "This combines a new venture company and
traditional companies. I expect the group will bring a
fresh breeze into Japan's banking sector."

The Softbank-led consortium would pay one billion yen
(about HK$72 million) for existing shares and 100 billion
yen for new shares to be issued in the reborn bank, giving
it an 80 per cent stake, the FRC said.  The rest would be
held by a group of foreign and Japanese regional banks. The
Nihon Keizai Shimbun said the foreign banks would be Lehman
Brothers Holdings, Chase Manhattan Corp and UBS, which
would invest a combined 20 billion yen.

NCB would ask the government to pump in 240 billion yen by
purchasing 800 million preferred shares, the FRC said.
The two sides aimed to reach a final agreement on the sale
by July 9, the FRC said. The other members of the
consortium are Orix Corp, Japan's biggest leasing company,
and Tokio Marine & Fire Insurance.

Mr Tanigaki said he hoped the reprivatised bank would start
operations in August.  The newly appointed NCB president,
Tadayo Honma, said the bank planned to relist in three to
five years.

The agreement came a week after Softbank, which had been
negotiating exclusively with the government for the
previous three months, failed to agree terms by a deadline
and the FRC threw open the field again to other bidders.

Participation in the talks late last week by Softbank
president Masayoshi Son - one of the world's richest
technology entrepreneurs after Microsoft's Bill Gates -
appeared to have been crucial in breaking the deadlock.

It was unclear what concessions the Softbank group may have
made, but the FRC said NCB's auditor would make the final
inspection of its loan assets to determine how much should
be set aside as reserves for its problem loans. The
Softbank consortium had earlier insisted it be allowed to
scrutinise the quality of NCB's loan assets and assess the
size of loan loss provisions.

NCB, which collapsed under the weight of bad loans extended
during an asset price bubble a decade ago, was placed under
state control in December 1998.  It is a conventional "old
Japan" bank that specialises in real estate-related
lending.

Analysts said they were concerned about possible hidden
problem loans in NCB's portfolio and this issue was a key
reason behind last week's failure of talks between the
consortium and the government.  NCB figures on Friday
showed liabilities exceeded assets by 3.24 trillion yen as
of March 31, from 3.1 trillion yen a year earlier.

Softbank had planned to take a 49 per cent stake, with Orix
holding 20 per cent and Tokio Marine holding 15 per cent.
But Softbank recently said it wanted to reduce its stake
while still leading the consortium.  In an apparent bid to
ensure the purchase went ahead, Softbank last Thursday sold
3.16 million shares from its stake in Internet portal Yahoo
Inc to bank a US$336 million profit.

Japan's conventional banks face increased competition from
industry newcomers. Hi-tech giant Sony Corp and retailing
heavyweight Ito-Yokado want bank licences - ambitions
deemed unthinkable until Japan's recent moves to tackle
problems in the heavily indebted sector.

On Monday, failed Long-Term Credit Bank was reborn as
Shinsei Bank under the ownership of the US group Ripplewood
Holdings, becoming the first Japanese bank to be sold to a
foreign financial institution and putting further pressure
on domestic banks that have been slow to restructure.
Softbank's entry into the banking business would be certain
to intensify that competition.

"For the financial system overall, it's good news. It means
that Ito-Yokado and Sony will be next," ING Baring
Securities analyst James Fiorillo said. (South China
Morning Post  07-Jun-2000)


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

HYUNDAI MOTORS: Secession from parent group likely delayed
----------------------------------------------------------
Hyundai Motor's application for separation from the rest of
the Hyundai Group is likely to be delayed because a
shareholdings adjustment is still incomplete, company
sources said yesterday.

The "Hyundai Motor Group," which includes four companies,
Hyundai Motor, Hyundai Precision and Industry, Kia Motors
and Hyundai Capital, had planned to file a separation
application with the Fair Trade Commission by the end of
this week.

The application will not likely meet approval this week as
Hyundai Motor has not sold its 22.7 percent share of Korea
Industrial Development Co., 45 percent share of Hyundai
Unicorns and 50 percent stake in the Hyundai Economic
Research Institute yet, the sources said.

Hyundai Engineering and Construction was supposed to buy
the group's stakes in Korea Industrial Development and the
Unicorns. The shares of Hyundai Economic Research Institute
were also to be sold to other Hyundai affiliates including
Hyundai Electronics Ind., according to the plan of the
group's restructuring committee.

"The companies that are supposed to buy the stocks have not
held directors' meetings yet, and the application will be
able to be approved two days after the directors agree on
the plan in the meeting," a Hyundai Motor official said.

Officials of Hyundai Engineering and Construction, however,
said the company did not set a schedule on directors'
meeting yet and the group's restructuring committee will
adjust the stock purchase of Korea Industrial Development
Co. (The Korea Herald  07-Jun-2000)

KOREA MERCHANT BANKING CORP.: Deposit decline forboding
NARA BANKING CORP: Deposit decline forboding
YEUNGNAM MERCHANT BANKING CORP.: Deposit decline forboding
----------------------------------------------------------
Customer deposits at the nation's merchant banking firms
have been dwindling in recent months, placing their
operations in jeopardy.

This is in turn expected to affect the business sector, as
merchant banks are a major source of funding for many
firms. According to sources at both the Financial
Supervisory Service (FSS) and from within the merchant
banking industry Wednesday, customer deposits dropped by
W1.44 trillion in the three-month March-May period, further
undermining a difficult situation in the industry due to
liquidity problems at a number of merchant banks.

Following the government's recent suspension of operations
at two cash-strapped leading merchant banking firms, Nara
Banking Corp. and Yeungnam Merchant Banking Corp., the
Korea Merchant Banking Corp. found itself having to turn to
its largest shareholder Hana Bank, for W85 billion in
emergency funds on May 31.

Although officials at Korea Merchant Banking say the
current liquidity problem is temporary, market analysts are
still warning that minor merchant banking firms will be
affected if the cash crunch continues. Hana Bank has
implied that there is a limit to how much it can channel
into Korea Merchant Banking, saying it would not be able to
provide additional funds and would have to allow it to go
bankrupt.

Meanwhile, analysts say it seems likely that liquidity
problems will spread to other firms in the merchant banking
industry, but the government has been unable to come up
with any countermeasures to reinforce the sector, while
merchant banking firms themselves have also failed to come
up with any self-rescue plans. Although the government
introduced several incentives in February to encourage
merchant banking firms to merge with banks, to date, there
have been no applications for such a merger. (Digital
Chosun  05-Jun-2000)


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

BESCORP INDUSTRIES BHD.: Shortlists three white knights
-------------------------------------------------------
Debt-laden Bescorp Industries Bhd, currently placed under
special administrators, has shortlisted three prospective
"white knights" to help revive the company.

"We hope to announce the successful company by mid-June,"
said one of the company's special administrators, Mr David
Siew, adding that it is rather early to divulge any
information at this juncture.

The three candidates were chosen from a total of 12
proposals received.  Trading of the company's shares was
suspended since 1998 and the last traded price was RM1.08.

"We hope to implement the restructuring scheme in the next
five or six months, provided we have obtained approvals
from Danaharta and other relevant authorities. Our main aim
now is to identify the best workout plan in order to
serve shareholders' and creditors' interest at this point,"
Siew said after the company's annual general meeting
yesterday.

Bescorp registered a pre-tax loss of RM20.76 million for
the year ended December 31 1999, compared with RM62.70
million recorded in the previous year. Its accumulated
losses to date stand at RM184.23 million.  As operations
have come to a standstill, the company is merely winding
down its business.

The future of the company still remains uncertain until the
restructuring plan is put in motion. The company is
principally involved in construction.  Plans to restructure
the company will include new asset injection into the
company, a capital reduction scheme and the possibility of
introducing new financial instruments into the company's
shareholding structure.

Bernama reports Siew did not reveal the identity of the
three bidders.  However, he said some of them are in the
same industry as Bescorp which principally involved in
construction.  Once the successful bidder was announced,
both parties would enter into a memorandum of
understanding, followed by the due diligence process on the
rescue schemes, including assets to be injected into
Bescorp.

One of the major areas to be looked into was the settlement
of Bescorp's group net current liabilities of RM186.084
million, of which RM142.609 million comprised bank
borrowings.  He said like most rescue schemes that were
handled by special administrators, the parties involved
were mainly interested in acquiring the troubled companies'
listed status, "as this is faster than going public on your
own."  (Business Times  06-Jun-2000)

LINKEDUA BHD.: Restructures 965.2M rgt in loans
-----------------------------------------------
United Engineers Bhd said its unit Linkedua Bhd has
restructured 965.2 million rgt worth of loans with a bond
issue, land settlement and cash payments to lenders of its
syndicated term loan facility.

United Engineers said its unit Hartanah Lintasan Kedua Sdn
Bhd will issue up to 2.956 bln rgt bonds, with a present
value of 697.9 mln rgt, coupled with 230.5 mln rgt worth of
land and 36.8 mln rgt in cash, to lenders of Linkedua.
The statement also said Linkedua's trade creditors will
receive 115.7 mln rgt worth of land.

At the same time, United Engineers unit Projek Lebuhraya
Utara Selatan Bhd (PLUS) will issue up to 3.822 bln rgt of
bonds to Hartanah.  United Engineers said the restructuring
of the loans is necessary to alleviate the debt issues
faced by Linkedua in repaying its syndicated term loan and
unsecured creditors.  It is is not expected to have a
material effect on United Engineers' 2000 earnings, it
added. (AFX News Limited  06-Jun-2000)

TIME ENGINEERING BHD: Gets another reprieve from creditors
----------------------------------------------------------
Time Engineering Bhd is not having it easy after failing to
tie up with Singapore Telecommunications Ltd last month,
but has managed to win yet another reprieve from creditors.

The 47-per-cent associate of Halim Saad's Renong Bhd
yesterday postponed its meeting with creditors to July 12
from tomorrow with the blessing of the court.  According to
Bloomberg yesterday, Time Engineering -- the owner of Time
dotCom -- also managed to extend its court protection order
from creditors by another three months to Oct 26. Time has
been under court protection since mid-1998.

A Time official said the reprieve is needed because
Khazanah Nasional -- the investment arm of the Malaysian
government and the new partner to replace SingTel -- has
not completed its due diligence on Time dotCom.

"Creditors need to vote on a scheme that they are sure of.
Otherwise, creditors will be going in without a clear
picture," he said.

The executive added: "There's no guarantee that Time and
Khazanah will strike a deal." An analyst said the deal is
almost certain but Khazanah -- headed by Malaysian Prime
Minister Mahathir Mohamad -- is expected to pay
substantially less than what SingTel offered. "Time has no
choice," said the analyst.

The market has been rife with speculation that Khazanah
will pay less than RM3 per share for a 30-per-cent stake in
Time dotCom. In contrast, SingTel was expected to pay
RM3.30 apiece for a 20-per-cent stake in Time dotCom -- the
owner of a fibre-optics network in Malaysia.  Furthermore,
SingTel had offered to buy 14.5 per cent in Time
Engineering for RM649.3 million (S$294 million) and another
20 per cent in Time Online for about RM100 million.

The total investment for the minority stakes would have
amounted to about RM2.4 billion.  However, the Malaysian
political establishment objected to the deal with a firm
controlled by Temasek Holdings. Another uncertainty is the
new strategic partner for Time dotCom. The Bloomberg report
said Time Engineering plans to sell 10 per cent of Time
dotCom to Nasdaq-listed NTL Inc -- the United Kingdom's
largest cable operator.

Time had earlier said the sale of a 10 per cent stake in
Time dotCom to a strategic partner will come from
Khazanah's expected holding of 30 per cent.  However, a
businessman said Khazanah may not agree to it. The long
delay of Time Engineering's debt revamp also means that the
loss-making company's debts would rise substantially from
the current level of about RM5 billion.  Time Engineering
yesterday gained 12 sen to RM3.44 on news of the extension.
(Business Times  07-Jun-2000)


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

DAO HENG BANK: To give up license after merger
----------------------------------------------
Hong Kong-based Dao Heng Group Ltd. plans to surrender the
commercial banking license of its local subsidiary Dao Heng
Bank when it concludes a merger deal with Banco De Oro
Universal Bank of mall taipan Henry Sy.

BusinessWorld learned the Hong Kong conglomerate no longer
finds its local unit profitable and has in fact been on the
market for a merger since last year.
Sources said the group is ironing out a merger deal with
Banco De Oro, but has yet to sign a memorandum of agreement
(MoA).

The sources said Banco De Oro has been conducting a due
diligence audit which is already "about 90% complete."
The sources said Dao Heng Bank only has 315 employees,
making it easier for Banco De Oro to facilitate a merger.
A source from the bank said Dao Heng will not be entirely
divesting its holdings from the bank. The source added the
local bank has not been losing money, but did not provide
figures.

While the planned merger will have Banco De Oro as the
surviving entity, the sources said the Hong Kong group may
decide to retain a 20% stake in the merger.  One source
said the merger deal may be carried out by a share swap
arrangement.

A Dao Heng-Banco De Oro merger is deemed a "good business
fit."  Dao Heng has a regional presence while Banco De Oro
has a ready market -- the clients of Mr. Sy's other
businesses, especially his chain of malls.  The Dao Heng
Bank Group, which has more than 100 branches, is 71%-owned
by the Guoco Group in Hong Kong. The group has been ranked
as the second-biggest bank in Asia.

Banco De Oro has been on the lookout for a merger since the
Bangko Sentral (Central Bank of the Phils.) offered
incentives. The bank also made a bid for closed Urban Bank.
(Business World  07-Jun-2000)

RURAL BANK OF SAN MIGUEL: PDIC servicing its clients
----------------------------------------------------
The Philippine Deposit Insurance Corp. (PDIC) yesterday
said it has started servicing insured deposits of Rural
Bank of San Miguel (RBSM) four months after the Bulacan-
based bank was ordered closed.

The PDIC earlier said anomalous accounts, splitting of
deposits and the conversion of manager's checks into split
accounts have hampered its audit and consolidation of the
records leading to the delay in the servicing of insured
deposits.  RBSM has estimated total deposits of 566 million
Philippine pesos (PhP) (US$13.40 million at
PhP42.233:US$1), with insured deposits of only PhP333
million ($7.88 million).

In a statement, the PDIC said it started servicing RBSM
depositors in designated RBSM branches last May 31 and will
continue to do so until July 11, except in four branches.
PDIC said depositors of the Sta. Maria, Balagtas and Bocaue
Branches only have until July 4 while clients of Plaridel
Branch have only until June 13.

The PDIC is advising depositors to file their claims at the
following designated sites: depositors of Plaridel branch
should file their claims at the Plaridel branch; depositors
of San Miguel, San Rafael and San Ildefonso branches at the
San Miguel branch; depositors of Malolos and Hagonoy
branches at the Malolos Branch; depositors of Obando and
Bulacan branches at the Bulacan Branch; depositors of
Meycauayan and Marilao branches at the Marilao branch;
depositors of Bustos and Baliuag branches at the Bustos
branch and depositors of Sta. Maria, Bocaue and Balagtas
branch at the Balagtas branch.

Depositors who will not be able to claim their money on the
designated date will have to go to the PDIC main office in
Pasong Tamo in Makati City to process their claims.
The PDIC is also advising RBSM depositors to present their
evidence of deposit. (Business World  07-Jun-2000)

URBAN BANK: Top brass face DOSRI charges
----------------------------------------
Urban Bank founder and chairman Arsenio Bartolome III,
president Teodoro Borlongan and other top officials and
directors of the failed bank will be charged for possible
DOSRI (directors, officers, stockholders and related
interests) violations, Bangko Sentral ng Pilipinas (BSP)
Gov. Rafael B. Buenaventura said yesterday.

"It is no longer a question if charges will be filed
against Urban Bank officials and directors, but a question
of when," he said.

Informed sources said the monetary authorities, together
with government lawyers, have uncovered strong evidence
that Bartolome and Borlongan, among others, exceeded the 15
percent prescribed DOSRI limit imposed by the BSP. Under
BSP rules, a bank is prohibited from issuing DOSRI loans
amounting to more than its capital funds or beyond 15
percent of its total loan portfolio, whichever is higher.

According to sources, the loans granted to the officers
were used to rescue Urban Bank's hemorrhaging subsidiary,
Urbancorp Investment Inc.  While Buenaventura refused to be
specific, he said the BSP's legal department, along with
the Philippine Deposit Insurance Corp. (PDIC), the
Securities and Exchange Commission and the Department of
Justice (DOJ), are still collating documents and evidence
to build their case against Urban Bank officials and
directors.

He confirmed, however, that "definitely there will be
charges against Urban Bank. Clearly there were violations."

Since the Orient Bank fiasco, the BSP has been under
pressure to prevent more bank failures traced to abuse of
DOSRI privileges.  Orient Bank collapsed under the weight
of P6.1 billion non-performing loans, P5.4 billion of which
were traced to bank owner Jose Go.  Criminal charges have
been filed against Go by the Manila Prosecutor's Office.
Buenaventura said private parties are also expected to join
and file other suits against Urban Bank.

At the same time Buenaventura disclosed that there are now
six interested buyers of Urban Bank. However, he said the
interested parties have different ideas on what they want
to acquire.

"Some are willing to buy the bank and some only its
subsidiaries such as the real estate firm. Others are only
interested in the bank but do not want the investment house
which is more problematic than the bank," he explained.

Based on initial findings of the BSP and PDIC, Urban Bank
was adversely affected by the operations of Urbancorp, the
bank's failed investment house.  In fact, the BSP has been
getting complaints from individuals that Urban Bank
appeared to have been getting complaints from individuals
that Urban Bank appeared to have been facilitating
investments for its investment house, which is a clear
violation since placements in the investment house are not
considered as deposits.

Urbancorp reportedly has liabilities of over P10 billion
which Urban Bank tried to help cover. When depositors of
Urban Bank started pulling out their deposits, Urban Bank
declared a bank holiday on April 26 the same day the
Monetary Board decided to order the closure of the bank.
(Philippine Star  07-Jun-2000)

VICTORIAS MILLIONG CO.: Mancom opposes rehab alternative
--------------------------------------------------------
The Securities and Exchange Commission (SEC)-appointed
management committee (mancom) of Victorias Milling Co.
(VMC) is asking the regulator to junk the "defective"
alternative rehabilitation plan (ARP) submitted by the in-
house management of the sugar milling company.

The VMC mancom and the management have been at odds over
what course to take in rehabilitating the sugar milling
company.  Commenting on the recently-submitted ARP by VMC
management, VMC mancom said the former's plan is
procedurally defective because it violates corporate
recovery rules which "require that the submission of any
other plan must be presented, and heard, as a motion, and
VMC's failure to set the same for hearing renders it
fatally defective.

VMC mancom said it is the only body authorized to submit an
ARP since it was mandated by the SEC to submit such a plan,
and it was specifically tasked to undertake among others:
the management of VMC and to make the necessary
recommendation for rehabilitation.  Moreover, VMC mancom
said it is authorized to overrule or revoke the actions of
the previous management and board of directors.

The VMC mancom added that the ARP does not meet a new SEC
rule on corporate recovery which requires that the plan
must not be opposed by a majority of any class of
creditors.

According to VMC mancom, the ARP submitted by VMC has not
been approved by its secured and unsecured creditors. VMC
mancom said the creditors objected to the following
features: conversion of unsecured loan principal to common
shares representing 70 percent of the outstanding capital
stock of VMC; conversion of accrued interest of secured
loans to an eight percent cumulative, non-participating
preferred bond with balloon payment on the 15th year; and
conversion of accrued interest of clean creditors into a
20-year zero-coupon bond, redeemable in equal yearly
amounts beginning year 16 to 20.

The VMC mancom added the ARP does not commit to a cash
infusion of P400 million. "Since the P400-million cash
infusion would come from a new loan to be incurred by VMC
at 10-percent interest rate payable in three years, the
approval of the ARP may just be another futile exercise if
no creditor is willing to lend P400 million to VMC."

The VMC mancom also stressed that the ARP fails to consider
the hierarchy of rights of creditors as against
stockholders. It cited the covering letter of the ARP
signed by Manuel B. Ma¤alac which declares that they have
made a rational sharing of the loss or diminution of
interest of certain stakeholders of the company
particularly the shareholders, bank creditors and trade
creditors of the company.

"This statement fails to consider the legal truism that
creditors legally, historically and factually are preferred
over stockholders in the distribution of corporate assets
and there can be no distribution among stockholders without
first paying corporate creditors," the mancom said.
(Philippine Star  07-Jun-2000)

WESTMONT INVEST.CORP.: Defying SEC's cease & desist order
---------------------------------------------------------
Individual investors of Westmont Investment Corp. (Wincorp)
are accusing the distressed investment house of defying the
cease and desist order (CDO) of the Securities and Exchange
Commission (SEC) by reportedly continuing with its illegal
operations.,

These investors, numbering 25 with combined investments in
Wincorp of over P500 million and represented by legal
counsel Raval & Lokin law offices, had asked the SEC to
investigate the past and present officers of Wincorp.

In a letter to SEC chairman Lilia Bautista and Elizabeth C.
Martin, director of the SEC's prosecution and enforcement
department, the investors claimed that despite the CDO,
there is the "continuing and flagrant violations of the
said order by parties, who are directly or indirectly,
acting for and on behalf of Wincorp."

They said these acts constitute violations of certain
commercial laws governing investment houses and their
transactions.  The investors said certain entities are
including Wincorp creditors to "accept a settlement plan"
allegedly prepared by self-styled independent solicitors.

"Despite the issuance and subsequent upholding of the CDO,
this solicitation continues unabated. We also have firm
basis to believe that these self-styled independent
solicitors are actually agents of Wincorp and/or Westmont
Bank -- United Overseas Bank Philippines, considering that
they clearly have been given access to detailed information
on the investors/borrowers, as well as confidential data
which could have come only from Wincorp, and/or Westmont
Bank-UOB Phils., Raval & Lokin told Bautista."

The investors said Wincorp is violating the law governing
investment houses by offering a settlement plan. For one,
the offering of a settlement plan, coupled with the
continuing failure to make interest payments upon maturity
date of the existing investments, constitutes a categorical
admission on Wincorp's part that it failed to maintain the
minimum unimpaired capital required of investment houses.

Wincorp also allegedly failed to establish the required
minimum paid up capital of P300 million for investment
houses despite the lapse of the two-year compliance period.
Lawyers for the individual invest or also noted that in a
recent meeting they held with their clients, it was
discovered that officials of Wincorp, as well as certain
branch managers of Westmont Bank-UOB Phils., had also
committed other violations of the CDO.

Wincorp, for one, despite a written demand to the contrary,
continues to reinvest earnings accruing on the various
investments made by the individual investors.

"In this manner, Wincorp is violating the CDO by continuing
to engage in the business of investment placement, as well
through the continued negotiation of these investments to
borrower companies," the lawyers said.

The SEC issued a cease and desist order against Wincorp
last month after finding certain violations. The CDO
prevents the company from further soliciting and issuing
commercial papers.  Based on complaints of several
investors, SEC said present and previous stockholders and
beneficial owners of Wincorp and affiliate bank, United
Overseas Bank Philippines (formerly Westmont Bank),
violated several laws of the prohibits investment houses
from securing loans form more than 19 creditors.

The SEC said Wincorp had been offering to the general
public unregistered securities in the form of a
confirmation advice (CA). Its business of lending or
extending credit to corporations or individual borrowers,
requires the execution of a promissory note and loan
agreement payable to Wincorp.

Prior to extending credit, Wincorp looks for funders who
are mostly individuals and issues them a CA using the loan
agreement as reference collateral. The CA, considered a
commercial paper (CP) under the new rules on registration
of short term CPs, has not been registered with the SEC nor
is it exempt from registration under the said rules.
(Philippine Star  07-Jun-2000)


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

BANGKOK TRANSIT SYSTEM: Struggles to keep from insolvency
---------------------------------------------------------
Tanayong, majority shareholder of the Bangkok Transit
system (BTS), will ask its creditors to convert its debt to
equity to save the Skytrain project from insolvency.

A BTS source said Tanayong is due to make a US dollar
denominated interest payment on June 31, but the company is
unlikely to be able to comply.  The debt service is worth
between 700 and 900 million baht. Tanayong said it plans to
use its credit lines with local finance firms to help it
pay.  However if lenders refuse to extend credit lines,
Tanayong said it will have no choice but to ask creditors
to swap debt for equity to keep the project alive.

In January, Vichet Buadhjuvong, BTS President, said the
company's total debt was equivalent to US$1.2 billion, out
of which $650 million was in US dollars.  The same source
also said that for its baht-denominated debt, the company
was scheduled to pay 120 to 150 million baht monthly or
four to five million baht daily.

"Unfortunately, the Skytrain generates only three to four
million baht per day, compared to the original target of 12
billion baht, which is not enough to pay the interest let
alone the principal sum," said the source.

Tanayong is said to have been in talks with creditors about
converting debt to equity, but the creditors are "not too
happy" about the proposal, the source said.  In the event
that the lenders turn down both the credit line and the
debt conversion plan, the source said, the last resort for
Tanayong will be to issue new shares to public.

The company had recently proposed a new share issuance
scheme to the Securities and Exchange Commission (SEC).
Generally, the SEC doesn't look at a company's operating
results as a criteria to approve new share offering, but
instead it considers company's ability to generate
dividends, and places emphasis on its financial disclosure
willingness. If approved, the company must proceed within
six months.

"Issuing new shares right now is a next to impossible task
because of BTS's inability to meet its revenue targets, and
there's no sign that creditors would agree to swap debt.

The Skytrian, which started operations last December, is
less popular among Bangkokians than expected, who cite the
inconvenience of commuting to and from stations as the
discouraging factor.  Yesterday Tanayong shares closed at
3.30 baht, down 0.20 baht. (Bangkok Post  07-Jun-2000)

SAHAVIRIYA CITY: Survives bankruptcy cases
------------------------------------------
Sahaviriya City, a property developer, has weathered four
bankruptcy cases filed by creditors seeking repayment of
311 million baht.

The Central Bankruptcy Court dismissed one case, while the
other three actions were settled out of court. The
developer of SV City Riverside condominium and property
development arm of Sahaviriya Group faced a claim for 49.8
million baht from Book Club Finance. The case was dismissed
late last year because it was unclear whether or not
Sahaviriya City was insolvent.

Thaisri-Zurich Insurance bought debentures from Sahaviriya
City and received interest only once. The claim for accrued
debt of 14.2 million baht was settled. Agreement was also
reached on Mutual Fund's claim for 68.2 million baht, and
Kri-Thai Co's claim for 149.5 million baht. (Bangkok Post
07-Jun-2000)


S U B S C R I P T I O N  I N F O R M A T I O N

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