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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      

      Tuesday, May 12, 1998, Vol. 1, No. 57

                    Headlines


C H I N A   &   H O N G   K O N G

CHINA EVERBRIGHT TECH: 1997 Results Announcement
FORLUXE SECURITIES: Liquidators Verify Missing $25m
KEL HOLDINGS: Board Responds on Restructuring Moves
KUMAGAI GUMI: China Everbright Boosts Company's Future
SOUTH CHINA INDUSTRIES: 1997 Results Announcement
SOUTH CHINA STRATEGIC: 1997 Results Announcement
TOMORROW INTERNATIONAL: Reports 85 Percent Drop in Profit


I N D O N E S I A

SALIM GROUP: Sells Its California Retail Bank


J A P A N  

DAIEI INC: S&P Lowers Rating on Weak Earnings


K O R E A

DONG AH: Collapse Imminent Unless Credit Suisse Rescues
HAITAI GROUP: Group May be Brought Down by Creditor Banks
JINDO GROUP: Group May be Brought Down by Creditor Banks
KIA MOTORS: Former Chairman to be Arrested on Embezzlement
KOHAP GROUP: Group May be Brought Down by Creditor Banks
SHINWON GROUP: Group May be Brought Down by Creditor Banks


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

CHINA EVERBRIGHT TECH: 1997 Results Announcement
------------------------------------------------
For the nine-month period of April 1, 1997 to December 31,
1997, China Everbright Technology Limited reports a net
loss of HK$24,062,000 on turnover of HK$112,579,000. This
compares to a net profit of HK$75,800,000 on turnover of
HK$70,482,000 for the twelve-month period of April 1, 1996
to March 31, 1997. As resolved in the extraordinary general
meeting held on 12th September 1997, the Company has
changed its financial year end date from 31st March to 31st
December to coincide with that of its controlling   
shareholder, China Everbright Holdings Company Limited.  
Accordingly, this set of audited  consolidated accounts of
the Group has been prepared for the nine months ended 31st
December 1997. Exceptional items include deficit on
revaluation of investment properties and provision for
impairment of fixed assets.
(SEHK 08-May-1998)


FORLUXE SECURITIES: Liquidators Verify Missing $25m
---------------------------------------------------
Provisional liquidators for troubled Forluxe Securities
have confirmed $25 million disappeared from the company's
coffers before its boss James Mui Kwong-nok disappeared.
Forluxe and its finance arm, Forluxe Finance, are being
liquidated by Tong Yat-hung and Nick Hill of Nelson Wheeler
Corp Reconstruction and Insolvency.

Mr Mui is being sought by the Commercial Crime Bureau in
connection with an alleged conspiracy to defraud. He is
understood to have left Singapore on Monday after
disappearing last Saturday. The police are also trying to
track down Mr Mui's brother, Gordon Mui Wing-fat, a Forluxe
Finance director.

"We are investigating the allegations. We realise the
brokerage's money has been used and are looking into how it
actually happened," Mr Hill said.

The provisional liquidators will meet Forluxe Securities'
630 cash and margin account clients on Thursday when basic
financial information such as its liabilities and cash
balance will be made available, he said. Sources said
Forluxe had $8 million worth of shares in the Central
Clearing and Settlement System and a securities trading
seat valued at $7 million. Its liabilities are estimated at
$40 million.
(South China Morning Post 09-May-1998)


KEL HOLDINGS: Board Responds on Restructuring Moves
---------------------------------------------------
The Board of Directors of KEL Holdings Limited has noted a
press article in Hong Kong Economic Journal on 7th May,
1998, reporting matters relating to the financial
restructuring of KEL and its subsidiaries (together, the
"KEL Group"). The Board would like to clarify that certain
contents of such press article were incorrectly stated. The
Board confirms that (i) the proposal of the financial
restructuring is at a very preliminary stage, terms of
which are not yet finalized and such proposal may or may
not proceed; (ii) the total current outstanding bank
borrowings of the KEL Group amounts to about HK$341.5
million; and (iii) no discussion is in process with any
independent potential investors for fund raising purpose.
The Board confirms that KEL Group has sufficient working
capital for its present requirments.

Shareholders of KEL should exercise caution when dealing in
the shares of KEL. Further announcement will be made when
there is any material development to the above-mentioned
matters.

By Order of the Board
Leung Yat Tung
Chairman

Hong Kong, 7 May, 1998

(SEHK 08-May-1998)


KUMAGAI GUMI: China Everbright Boosts Company's Future
------------------------------------------------------
A renovation at Kumagai Gumi (HK) Ltd. has left the Hong
Kong construction company with new management, more cash
and more contracts, and, for long-term investors, new
appeal, reports the Hong Kong Week section in some
editions of the Asian Wall Street Journal Monday. Last
month, mainland-backed China Everbright International Ltd.
announced plans to raise its stake in Kumagai Gumi to 35%
from 21%. Since then, China Everbright has handed two
lucrative mainland contracts to Kumagai Gumi.

The Hong Kong company will serve as the main contractor on
a 49-story, HK$1 billion office tower in the Pudong
district of Shanghai. And it will hold a 20% stake in a
24.5-kilometer toll road and bridge project that China
Everbright is building in Fujian province.

The prospect of more contracts from a strong parent makes
Kumagai Gumi, which is trading at a deep discount to its
net asset value, a very good deal, some analysts say but
only for long-term investors. The company won't reap
profits from the latest deals for several years. Moreover,
net profit this year is likely to fall sharply: Kumagai
Gumi is having a tough time selling space at two office and
residential projects in Shenzhen and Guangzhou, and at an
industrial park on Hainan Island. And, it has no new
projects in Hong Kong this year to bring in cash.
(Dow Jones Newswires  11-May-1998)


SOUTH CHINA INDUSTRIES: 1997 Results Announcement
-------------------------------------------------
For the period January 1, 1997 to December 31, 1997, South
China Industries Limited reports a net profit of
HK$28,209,000 on turnover of HK$1,575,798,000. This
compares to a net profit of HK$65,301,000 on turnover of
HK$1,427,693,000 for the corresponding 1996 period.
Exceptional items in 1997 comprised gain on disposal of
interests in an associated company of approximately
HK$19,640,000, gain on disposal of interests in a
subsidiary of approximately HK$5,900,000 and loss on    
disposal of a subsidiary of approximately HK$1,368,000.
(SEHK 08-May-1998)


SOUTH CHINA STRATEGIC: 1997 Results Announcement
------------------------------------------------
For the period January 1, 1997 to December 31, 1997, South
China Strategic Investments Limited reports a net loss of
HK$235,312,000 on turnover of HK$134,653,000. This compares
to a net loss of HK$56,555,000 on turnover of HK$54,129,000
for the corresponding 1996 period. Pursuant to the group
reorganisation which became effective on 14 October    
1997, the Company became the holding company of the group
by exchange of its shares for the entire issued share
capital of the former holding company of the Group, South
China Strategic Limited ("SCS"), and the Company's shares
were then listed on The Stock Exchange of Hong Kong    
Limited in place of the shares of SCS. The reorganisation
has been accounted for in the consolidated accounts as if
the Company had been in existence and was the holding
company of the Group throughout the two years under review.  
The directors consider that the consolidated accounts,
prepared on this basis, present fairly the results and
state of affairs of the Group as a whole.
(SEHK 08-May-1998)


TOMORROW INTERNATIONAL: Reports 85 Percent Drop in Profit
---------------------------------------------------------
Electronic-products maker and distributor Tomorrow
International Holdings reported an 84.66 per cent plunge in
attributable profit to $11.02 million for the 14 months to
December. Turnover dropped 3.66 per cent to $557.05 million
compared with $578.25 million for the year to December,
1996. Earnings per share were 2.5 cents against 17.8 cents
a year before. No final dividend will be paid. The company
said profit margins declined significantly due to increased
costs from its reorganisation programmes and expansion
plans. Tomorrow said the trading and distribution of
electronic components and parts suffered amid a depressed
market.
(South China Morning Post 11-May-1998)


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

SALIM GROUP: Sells Its California Retail Bank
---------------------------------------------         
One of Indonesia's largest financial conglomerates has
relinquished ownership of a U.S. retail bank. The Salim
Group of Indonesia and its Hong Kong subsidiary First
Pacific Company have sold their stakes in United Commercial
Bank of California. UCBH Holdings Inc., the holding company
for the California bank, funded the management led buy-out
of the bank through a $170 million private capital
offering.

According to Jon Downing, chief financial officer at United
Commercial Bank (UCB) in San Francisco, the former owners
relinquished control of the bank "to further their
investments in Asia at this time to take advantage of
excellent buying opportunities." Several Asian-owned banks
so far this year have reduced their holdings in this
country as liquidity and debt pressures have hit their home
country operations.

The private equity offering consisted of $140 million of
shares of common stock and $30 million of trust-preferred
securities issued by a wholly-owned subsidiary of the bank
holding company, UCBH Trust Co. UCBH assets totaled $1.6
billion as of December 31, with deposits of $1.5 billion.
It has 25 retail bank offices in California, primarily in
the San Francisco Bay area and the Sacramento/Stockton and
Los Angeles metropolitan areas. The flagship bank of the
Salim Group, P.T. Bank Central Asia, also has two
commercial bank branches in New York.
(Thompsons International Banking 11-May-1998)


=========
J A P A N  
=========

DAIEI INC: S&P Lowers Rating on Weak Earnings
---------------------------------------------
Standard & Poor's today lowered its rating based on public
information, or 'pi' rating, of Daiei Inc. to single-'Bpi'
from double-'Bpi'. The downgrade reflects the company's
weak earnings capability stemming from worsening
competitiveness in its core merchandising and superstore
operations, its very weak financial profile characterized
by a sizable debt burden, and growing concerns over
strains on the asset quality of the entire Daiei Group.

Japan's largest general merchandiser in terms of
consolidated sales, Daiei recorded a recurring loss of N9.7
billion (about US$75 million) for fiscal 1997 (ended Feb.
28, 1998). This was largely the result of the increased
cost required to enhance competitiveness in the company's
superstore business. Daiei has announced plans to pursue
various restructuring efforts, including the
rationalization of store operations and the disposal of
certain assets to reduce consolidated debt. However, the
prospect of prolonged weakness in consumer spending in
Japan could seriously limit the benefits of such
restructuring over the near term.

Daiei has relied heavily on debt financing to fuel business
expansion in both retail and nonretail areas over the past
several years, significantly elevating the debt burden.
Pretax interest coverage at the end of fiscal 1997 was
meager at under 1.0 times. The net debt to capital ratio
continued to exceed 90%. The pressures of a long-term
economic downturn in Japan are generating increasing
uncertainties regarding both group asset quality and the
potential for sizable liabilities at major group companies.

Daiei's credit quality is expected to remain under pressure
in the near term, given the expected difficulty of
achieving a marked improvement in the company's business
position and the limited extent to which the planned
restructuring will likely help strengthen the company's
financial structure, Standard & Poor's said.
(S&P CreditWire 08-May-1998)


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

DONG AH: Collapse Imminent Unless Credit Suisse Rescues
-------------------------------------------------------
Choi Won-suk, chairman of the Dong-Ah Group, has every
reason to be a nervous man. Funds for the group, which
built a huge desert pipeline for Libya, have all but dried
up and he will learn this week if creditors of the
construction giant he founded will save it from collapse.

On Friday, South Korea's 10th-largest conglomerate, with
debts estimated at 4.4 trillion won (about HK$24.5
billion), was thrown a lifeline by its creditors, who
agreed to cover 30 billion won of bills due this week,
while Credit Suisse First Boston considers a US$500 million
bailout. The creditors, led by SeoulBank, say they have
gone as far as they are prepared to go, which means Dong-Ah
will collapse unless Credit Suisse First Boston finalises
the loan this week. The investment bank is believed to be
ready to extend the loan only if the state-run Korea
Development Bank acts as a guarantor. The bank has yet to
make a decision.

With estimated debts of $3.7 billion, Dong-Ah's financial
woes worsened last month when the government refused to
approve its ambitious $4 billion project to turn a vast
reclaimed area west of Seoul into an international
industrial and leisure complex. The reclaimed area is
restricted to farming purposes. Dong-Ah avoided becoming
just one in a series of casualties early this year after
receiving 360 billion won of emergency loans from its
creditors. During the past few days, it gained a bit more
room to manoeuvre when creditors extended at least 50
billion won in similar aid at the request of the
authorities in Seoul.

The government fears any failure by Dong-Ah, in addition to
the large bankruptcies in recent months, will deal a final
blow to an already faltering economy and aggravate a
serious unemployment problem. Last week, in a desperate
move to avoid bankruptcy, Mr Choi said he would hand over
to creditors 20 billion won worth of shares in the group's
21 subsidiaries if they helped him save his empire (TCR-AP
08-May-1998). The shares are held by the creditors as loan
collateral. He also offered to sell the group's prime
inland transportation unit, estimated at one trillion won,
to foreign companies to repay some debts. The talks with
CSFB centre on the borrowing of $250 million and the sale
of another $250 million of bonds in a private placement.
(South China Morning Post 11-May-1998)


HAITAI GROUP: Group May be Brought Down by Creditor Banks
---------------------------------------------------------
Corporate reforms by the banking sector could potentially
zap out at least a dozen large companies and groups with
emergency loans, including Dong Ah, Haitai and Kohap,
according to blueprint announced yesterday. Officials at
the Commercial Bank of Korea (CBK) the lead bank
responsible for setting up creditor banks' common
evaluation standards' reiterated President Kim's remarks
Sunday that the "good" will be separated from the "bad"
within this month.

"Each creditor bank will rank their borrowing companies
into three classes 'normal, possible survival and failure'
by the end of May," said Kim Dong-hwan, CBK's director &
executive vice president at the briefing held at the
central Bank of Korea. Depending on the ranking, companies,
including the units of top 30 groups, will be directed what
Kim called work-out plans, expected to include orders for
insolvency declaration, bankruptcies, and management
changes.

Those staying afloat on emergency loans include among
others Dong Ah Construction Industrial Co., Kohap Group,
Haitai Group, Jindo Group and Shinwon Group. These groups
do not include those already declared bankrupt or placed
under court protection for debt rescheduling, such as
Hanbo, Halla, Kia and Jinro.
(Korea Herald 12-May-1998)


JINDO GROUP: Group May be Brought Down by Creditor Banks
--------------------------------------------------------
Corporate reforms by the banking sector could potentially
zap out at least a dozen large companies and groups with
emergency loans, including Dong Ah, Haitai and Kohap,
according to blueprint announced yesterday. Officials at
the Commercial Bank of Korea (CBK) the lead bank
responsible for setting up creditor banks' common
evaluation standards' reiterated President Kim's remarks
Sunday that the "good" will be separated from the "bad"
within this month.

"Each creditor bank will rank their borrowing companies
into three classes 'normal, possible survival and failure'
by the end of May," said Kim Dong-hwan, CBK's director &
executive vice president at the briefing held at the
central Bank of Korea. Depending on the ranking, companies,
including the units of top 30 groups, will be directed what
Kim called work-out plans, expected to include orders for
insolvency declaration, bankruptcies, and management
changes.

Those staying afloat on emergency loans include among
others Dong Ah Construction Industrial Co., Kohap Group,
Haitai Group, Jindo Group and Shinwon Group. These groups
do not include those already declared bankrupt or placed
under court protection for debt rescheduling, such as
Hanbo, Halla, Kia and Jinro.
(Korea Herald 12-May-1998)


KIA MOTORS: Former Chairman to be Arrested on Embezzlement
----------------------------------------------------------
Prosecutors yesterday sought a warrant to arrest Kim Sun-
hong, former chairman of the failed Kia Motors Co., on
charges of embezzlement. Kim is charged with having
diverted at least 30 billion won of the company funds to an
in-house commission he controlled, which purchased Kia's
stocks between 1994 and last year so he could maintain
managerial control of the auto giant even after it went
bust last July. Prosecutors, however, said they found no
evidence backing the allegation Kim had amassed a huge
slush fund to bribe officials or politicians.

Kim is accused of contributing to the country's financial
crisis by refusing to resign from Kia's chairmanship even
though his mismanagement caused the company to go bankrupt
under heavy debts. His refusal to resign prevented the
government from selling the company which created a crisis
of faith in Korean industry.
(Korea Herald 12-May-1998)


KOHAP GROUP: Group May be Brought Down by Creditor Banks
--------------------------------------------------------
Corporate reforms by the banking sector could potentially
zap out at least a dozen large companies and groups with
emergency loans, including Dong Ah, Haitai and Kohap,
according to blueprint announced yesterday. Officials at
the Commercial Bank of Korea (CBK) the lead bank
responsible for setting up creditor banks' common
evaluation standards' reiterated President Kim's remarks
Sunday that the "good" will be separated from the "bad"
within this month.

"Each creditor bank will rank their borrowing companies
into three classes 'normal, possible survival and failure'
by the end of May," said Kim Dong-hwan, CBK's director &
executive vice president at the briefing held at the
central Bank of Korea. Depending on the ranking, companies,
including the units of top 30 groups, will be directed what
Kim called work-out plans, expected to include orders for
insolvency declaration, bankruptcies, and management
changes.

Those staying afloat on emergency loans include among
others, Dong Ah Construction Industrial Co., Kohap Group,
Haitai Group, Jindo Group and Shinwon Group. These groups
do not include those already declared bankrupt or placed
under court protection for debt rescheduling, such as
Hanbo, Halla, Kia and Jinro.
(Korea Herald 12-May-1998)


SHINWON GROUP: Group May be Brought Down by Creditor Banks
----------------------------------------------------------
Corporate reforms by the banking sector could potentially
zap out at least a dozen large companies and groups with
emergency loans, including Dong Ah, Haitai and Kohap,
according to blueprint announced yesterday. Officials at
the Commercial Bank of Korea (CBK) the lead bank
responsible for setting up creditor banks' common
evaluation standards' reiterated President Kim's remarks
Sunday that the "good" will be separated from the "bad"
within this month.

"Each creditor bank will rank their borrowing companies
into three classes 'normal, possible survival and failure'
by the end of May," said Kim Dong-hwan, CBK's director &
executive vice president at the briefing held at the
central Bank of Korea. Depending on the ranking, companies,
including the units of top 30 groups, will be directed what
Kim called work-out plans, expected to include orders for
insolvency declaration, bankruptcies, and management
changes.

Those staying afloat on emergency loans include among
others Dong Ah Construction Industrial Co., Kohap Group,
Haitai Group, Jindo Group and Shinwon Group. These groups
do not include those already declared bankrupt or placed
under court protection for debt rescheduling, such as
Hanbo, Halla, Kia and Jinro.
(Korea Herald 12-May-1998)


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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