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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, March 4, 1999, Vol. 2, No. 44

                    Headlines


* C H I N A   &   H O N G   K O N G *

GUANGDONG ENTERPRISES: Row escalates on Nam Yue losses
SING TAO HOLDINGS: Confirms talks progressing on stake sale
SING TAO HOLDINGS: Sing Tao lays off staff
WHIMSY ENTERTAINMENT: Price leaps on injection rumour


* I N D O N E S I A *

BANK NUSA: Bakrie sells assets to keep Bank Nusa open


* J A P A N *

HOKKAIDO TAKUSHOKU: Prosecutors grill former execs on loans
JUSCO COMPANY: Supermarket to absorb affiliates
THERME INTERNATIONAL: Loans from defunct bank examined
TOYO TRUST: To sell equity worth $832.8mn to Sanwa Bank
YAOHAN INTERNATIONAL: Takugin extended loan to Yaohan


* K O R E A *

HAITAI CONFECTIONARY: Cho Hung finalizes Haitai workout
NATIONAL AGRICULTURAL COOP: Probe of huge losses launched
SAMSUNG MOTORS: Delay in Samsung-Daewoo swap causes losses
SHIN DONG AH GROUP: Indictment on embezzlement charges
SHINSUNG MATERIALS: Starts creditor reconciliation

SSANGYONG CONSTRUCTION: Creditors to swap debt to equity


* M A L A Y S I A *

RENONG BHD: Renong to reveal revised rescue plan


* T H A I L A N D *

BANGKOK LAND: To raise Bt2bn through fourth asset sale


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

GUANGDONG ENTERPRISES: Row escalates on Nam Yue losses
------------------------------------------------------
According to the South China Morning Post, creditors of the Guangdong
government's investment arm in Macau, Nam Yue, said they should be
indemnified against losses on loans that were made on misleading
information. The call came
as controversy grew over the role of government officials, company
executives and accountants in the huge losses reported at Guangdong
investment arms in Hong Kong and in Macau.

One Macau-based bank representative questioned whether the provincial
government, which was responsible for appointing officials to Nam Yue,
should indemnify them against losses from lending that was based on
possible representation of the firm's financial position.

Creditor banks of Guangdong Enterprises (GDE) and Guangnan (Holdings) also
questioned the role of company directors and reporting accountants for
substantial exceptional losses.

KPMG, appointed by the Guangdong government to audit the books of the
investment arms for the nine months to September, said in its report on
Guangnan that $2.45 billion of the firm's exceptional items of $3.4 billion
had been brought forward from Dec 1997.

Stock exchange spokesman said the exchange would follow up on the many
queries arising from Guangnan's accounts.

KPMG said in its qualified report on Guangnan that at least $1.07 billion
of the exceptional items brought forward from 1997 should have been
provided for in the accounts of 1997 or previous years.

A partner in accounting firm Arthur Anderson said there was suspected fraud
in the items brought forward, such as irregular trading balances and
unsubstantiated payments of about $434.1 million.

Meanwhile the proposed merger of GDE and Nam Yue has met with resistance
from Macau-based creditor banks.

A Macau-based creditor bank official said the debt and asset restructuring
of Nam Yue should be a straight forward case that could easily be solved by
the injection of one or two assets but including it in the wider
restructuring plan of GDE would make things more complicated. This was
especially so as GDE had a much bigger negative net worth and involved
dozens more creditor banks and bond and note
trustees and a number of listed companies.

According to the Hong Kong Standard, the massive restructuring job outlined
on Monday by parent GDE, while viewed as short on specifics, was offering
some logic, and restructuring might have Guangdong Investment and Guangnan
(Holdings) emerge as viable entities, but much depends on assets injected
into them.

GDE officials said the companies would be refocused into their core
businesses and transfer their non-core businesses to other GDE entities and
are expected to receive asset injections.

Guangdong Investment would focus on utilities, infrastructure, property and
hotels, and would likely give up its interests in Guangdong Brewery
(Holdings) and Guangdong Tannery, as well as travel, trade, finance and
retail businesses.

An analyst with ABN Amro Asia said refocusing on infrastructure, utilities
and (mainland) housing probably means that the earnings going forward will
be less volatile and better quality and Guangdong Investment might remain
solvent but few details had been released.

Analysts are hopeful that Guangdong Investment will receive a number of
infrastructure holdings including Dongsheng Water Supply.

According to the restructuring outlined, Guangnan will stick to its food
and supermarket businesses.


SING TAO HOLDINGS: Confirms talks progressing on stake sale
-----------------------------------------------------------
According to the South China Morning Post, Sing Tao Holdings has confirmed
Sally Aw Sian is in talks with a consortium to sell her interest in the
company, but has
yet to sign an agreement, and Ms Aw's major creditor, Yosham, a company
linked to Hong Kong tobacco chief Ho Ying-chie, had been informed of the
talks.

Sing Tao said yesterday a prerequisite for an agreement was whether the
consortium, made up of Sam Zell, China Enterprise Development Fund (CEDF)
and the Investment Co of China (ICC), would be exempted from launching a
general offer for Sing Tao shares.

Sources said the consortium planned to buy Ms Aw's 50.04 per cent stake in
Sing Tao for $265 million at $1.25 a share. The offer price matched a rival
bid by Lazard Asia Investment Management, but was higher than an earlier
offer by CEDF and ICC.

Sources said the consortium hoped Yosham would withdraw the bankruptcy
petition. Sing Tao also hinted at such a possibility, saying cooperation
from the interim receiver may or may not be necessary for the proposed
acquisition to proceed.

The Hong Kong Standard said CEDF and ICC have sought confirmation from the
Securities and Futures Commission of a waiver for general offer.

Sing Tao Holdings and Hong Kong Sunrise Holdings announced in a joint
statement that a prerequisite for the proposed acquisition would be such a
confirmation from the SFC. It said that Yosham had been informed of the
proposed acquisition. The newspaper article quoted the announcement
as adding that "The investors are not in negotiations with the interim
receiver appointed for Ms Aw regarding the proposed acquisition."


SING TAO HOLDINGS: Sing Tao lays off staff
------------------------------------------
The Asian Wall Street Journal reported Sing Tao Holdings laid off 22
employees at the English language Hong Kong Standard newspaper in a cost
cutting efforts. The report stated that most of those laid off were
clerical and sales employees. The layoffs were in response to shrinking
advertising revenue due to Hong Kong's recession. Sing Tao Holdings also
publishes the Chinese language Sing Tao Daily newspaper.

Last December, Sing Tao reported a net interim loss of HK$13.8 million for
the six months ending in September 1998.


WHIMSY ENTERTAINMENT: Price leaps on injection rumour
-----------------------------------------------------
According to the South China Morning Post, Whimsy Entertainment saw its
shares jump 37.5 per cent yesterday as the company assured investors it
would remain listed
despite a decision to wind up most of its core indoor game centre business.
The stock closed at 11 cents on heavy trading.

Brokers said investors were speculating on possible asset injections by
controlling shareholder New York-listed Brilliance China Automotive
Holdings which holds 33.69 per cent.

A Whimsy spokeswoman said Brilliance China had yet to form any plans to
sell assets to the group.

The company's problems stem from heavy losses and debts at the subsidiary
Whimsy Co which generated about 80 per cent of an unspecified group loss
last year and debts of $46 million. Its net tangible asset value stood at
$56 million on Dec 31.

Creditor Million Master International has filed a writ against Whimsy Co
claiming $267,427.6 for unpaid goods.

The Hong Kong Standard reported on the writ by Million Master International
and another writ by Good Focus Holdings demanding $1.172 million for shop
rent, management fees, air-conditioning charges, promotional levy and
government rates, as well as interest payment and other expenses.


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

BANK NUSA: Bakrie sells assets to keep Bank Nusa open
-----------------------------------------------------
The Asian Wall Street Journal reported that the Bakrie Group, and one of
Indonesia's largest conglomerates, has sold assets to prevent the
government from closing down its banking branch, Bank Nusa. The proceeds
from the sale (600 billion rupiah) will be used to raise the bank's capital
adequacy ratios to acceptable levels, and prevent it from being shut down.

The government of Indonesia is scheduled to shut down scores of yet
un-named banks this month.

Bakrie is controlled by the influential businessman Aburizal Bakrie, and is
active mainly in telecommunications, finance, and steel pipe manufacturing.


=========
J A P A N  
=========

HOKKAIDO TAKUSHOKU: Prosecutors grill former execs on loans
-----------------------------------------------------------
Law enforcers Tuesday began to grill former executives of failed Hokkaido
Takushoku Bank over their alleged involvement in illegal loans to a resort
hotel operator in this northern Japan city.

The Sapporo District Prosecutors Office and Hokkaido prefectural police
were questioning a former president and a former managing director on
aggravated breach-of-trust charges, informed sources said.

The two men are suspected of violating the Commercial Code by authorizing
illicit loans to a Sapporo-based corporate group led by Therme
International Hotel System while knowing that the group was virtually
insolvent.

By masterminding the illegal lending operations, they allegedly played a
central role in bringing the now-defunct bank to ruin, the sources said.

Sapporo-based Hokkaido Takushoku, dubbed Takugin, collapsed in November
1997 under the staggering weight of problem loans, earning the dubious
distinction of the first city bank to go under in Japan's postwar history.

The local law enforcement authorities' action against the former executives
is based on a criminal complaint filed last October by Takugin's in-house
committee to examine legal responsibilities of former executives for the
bank's  downfall.

The complaint said the former executives allegedly gave the final nod to
some 100 loan applications from the troubled Therme group, totaling about
10 billion yen, at the expense of Hokkaido Takushoku's financial health.

Takugin after the collapse transferred its operations to other banks and
its bad loans, estimated by the Ministry of Finance at 2.3 trillion yen,
were taken over by Resolution and Collection Bank. (Jiji Press English News
02-Mar-1999)


JUSCO COMPANY: Supermarket to absorb affiliates
-----------------------------------------------
Supermarket chain operator Jusco Co. said Wednesday it will absorb
retailing affiliates Shinshu Jusco Co. and Ogiya Jusco Co. on Aug. 21. The
arrangement is designed to cut personnel costs and boost the profitability
of the two affiliates whose sales have been floundering, Jusco Chairman
Takuya Okada and Jusco President Motoya Okada told a press conference.
(Kyodo 03-Mar-1999)


THERME INTERNATIONAL: Loans from defunct bank examined
------------------------------------------------------
Law enforcers Tuesday began to grill former executives of failed Hokkaido
Takushoku Bank over their alleged involvement in illegal loans to a resort
hotel operator in this northern Japan city.

The Sapporo District Prosecutors Office and Hokkaido prefectural police
were questioning a former president and a former managing director on
aggravated breach-of-trust charges, informed sources said.

The two men are suspected of violating the Commercial Code by authorizing
illicit loans to a Sapporo-based corporate group led by Therme
International Hotel System while knowing that the group was virtually
insolvent.

By masterminding the illegal lending operations, they allegedly played a
central role in bringing the now-defunct bank to ruin, the sources said.

The complaint said the former executives allegedly gave the final nod to
some 100 loan applications from the troubled Therme group, totaling about
10 billion yen, at the expense of Hokkaido Takushoku's financial health.
(Jiji Press English News 02-Mar-1999)


TOYO TRUST: To sell equity worth $832.8mn to Sanwa Bank
-------------------------------------------------------
Toyo Trust & Banking Co will increase its capital by selling 100 billion
yen (US$832.8 million) in equity -- 20 billion in common stock and 80
billion in preferred stock
-- to Sanwa Bank (TSE:8320), company officials announced. The sale will
boost Sanwa's stake in the firm to around 12%, from 4.9%, making Sanwa the
largest shareholder. The stock will be issued at 314 yen per share, with
payment due March 30. (Asia Pulse 03-Mar-1999)


YAOHAN INTERNATIONAL: Takugin extended loan to Yaohan
-----------------------------------------------------
Sadamasa Kawatani, one of three former Hokkaido
Takushoku Bank (Takugin) senior executives arrested on aggravated breach of
trust, extended a 2.4 billion yen loan without collateral to a Yaohan Japan
Corp. affiliate before the bank went bust in November 1997, police sources
said Wednesday.

Sadamasa Kawatani, 64, Takugin's president at the time, allegedly
authorized the loan in March 1996 to Yaohan International Sapporo (YIS),
the sources said.

The amount of the loan was equal to a debt owed by hotel management company
Therme International Hotel System to YIS.

Police believe that Kawatani provided the loan to the Yaohan affiliate to
prevent the collapse of Therme and to avoid scrutiny of the bank's lending
practices.

Kawatani was arrested Tuesday, along with Hiroshi Yamauchi, 71, also a
former Takugin president, and another senior Takugin executive on suspicion
of aggravated breach of trust by causing massive losses to the bank through
illegal loans to Therme.

By extending the loan, the Sapporo-based bank, in effect, took over the
debts Therme owed to the Yaohan affiliate, the sources said.

According to the sources, Yaohan, a failed supermarket chain operator, had
planned to join a project by Therme to develop hotels and a resort in the
Barato district in northern Sapporo.

Yaohan had paid 2.4 billion yen to Therme by November 1991 for 10 hectares
of agricultural land in the area to be developed on the condition that the
land would be converted for commercial use, the sources said.

However, the land was never converted, and the development project ended in
failure with the withdrawal of Yaohan in October 1995. The 2.4 billion yen
remained on Yaohan's books as debt owed by Therme, according to the sources.

In the meantime, Takugin signed a statement of joint liability for the debt
on March 31, 1995, by which time Therme's business had already soured, and
had set the due date for March 31, 1996, the sources said.

YIS collapsed in October 1998. The total amount of loans extended to the
Yaohan Japan group by Takugin was about 6 billion yen, including the 2.4
billion yen for YIS. The entire amount has been lost.

The two presidents were arrested on suspicion that they had extended 10
billion yen in additional loans to Therme from April 1994 with full
knowledge that the money was irrecoverable. (Kyodo News 02-Mar-1999)


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

HAITAI CONFECTIONARY: Cho Hung finalizes Haitai workout
-------------------------------------------------------
Cho Hung Bank, the main creditor of the insolvent Haitai Confectionary
group announced the finalized workout plan Wednesday for the food
conglomerate that has been essentially bankrupt since November 1997.

Haitai's total debt to Cho Hung, which after consolidation of all other
loans is the business' only creditor, is W1.5229 trillion.

Of this W525 billion will be converted to bank holdings in a debt to equity
swap, with the remainder being rolled over following the sale of Haitai
Soft Drinks to Cheil Jedang for W230 billion and the offering of 51% of
company shares to foreign investors. An official of the bank said the 51%
offering was to ensure that management rights would revert to any firm
making a bid for the company, as the bank would also back the new
shareholder with its holdings.
(Digital ChosunIlbo 03-Mar-1999)


NATIONAL AGRICULTURAL COOP: Probe of huge losses launched
---------------------------------------------------------
The Korea Herald reports that the Supreme Public Prosecutors Office has
started a full-fledged investigation into to irregularities at the National
Agricultural Cooperative Federation (NACF). A recent audit of the state run
NACF by the Board of Audit and Inspection (BAI) found that NACF executives
incurred huge losses by lending excessively to debt-ridden companies or by
providing such firms with payment guarantees. The article stated that since
August 1996, the amount of NACF non-performing loans has accumulated to 653
billion won. Executives are also suspected of having amassed a huge amount
of slush funds to bribe politicians and government officials.  

The federation president, Mr. Won Churl-hee resigned his post last Sunday
after the BAI audit was released. Loans and from the NACF which are now
non-performing were provided to Jinro, Hanbo, and other weak business groups.

The NACF is a federation of farmer's regional cooperatives, and runs a
nationwide banking network with 1,332 branches.  It also operates various
agricultural projects to help farmers. The NACF reportedly has about 50
trillion won in deposits.


SAMSUNG MOTORS: Delay in Samsung-Daewoo swap causes losses
----------------------------------------------------------
The current delay in the corporate swap involving Samsung Motors and Daewoo
Electronics has caused huge losses among not only Samsung and Daewoo but
vendor companies of Samsung parts suppliers.

According to the Ministry of Commerce, Industry and Energy yesterday,
losses incurred by the two companies and their vendors have reached 150
billion won since the announcement for the deal was made Dec. 7.

On the average, ministry officials said, Samsung has been causing losses of
an average of 50 billion won per month and is creating particular problems
for its 2,000-odd parts suppliers.

The losses are resulting mainly from the suspension of production by
workers of Samsung Motors who have been protesting the decision to give up
the automaking business in return for Daewoo Electronics.

The two companies have been engaged in a heated dispute over the continued
production of Samsung's SM5 series of passenger cars but are believed to be
closed to a deal on the swap.

The ministry officials said the 2,000-odd parts suppliers of Samsung
currently employ over 120,000 workers and the termination of the production
of SM5 cars could deliver a severe blow to the Pusan economy. (Korea Times
03-Mar-1999)


SHIN DONG AH GROUP: Indictment on embezzlement charges
------------------------------------------------------
The Korea Times reported that the chairman of Shin Dong Ah, Choi
Soon-young, was indicted by prosecutors on charges of embezzlement. Choi is
accused of smuggling $165 million out of Korea between May, 1996 and June
1997 after obtaining loans worth $185 million from four domestic banks
using fabricated export documents.  

Choi is also suspected of forcing to make Korea Life Insurance Company,
part of the Shin Dong Ah group, to make 100 billion won worth of unsecured
loans to SDA International (a Shin Dong Ah trading company subsidiary set
up by Choi that was formerly known as Shinahwon) in order to repay debts
owed to Korean banks.  

Earlier newspaper reports last month stated that this money was reportedly
used to buy a luxury house in Los Angeles and a personal jet.


SHINSUNG MATERIALS: Starts creditor reconciliation
--------------------------------------------------
According to the Korean language Maeil Kyungje's Business Brief section,
the Shinsung Materials Company started its creditor reconciliation procedure.


SSANGYONG CONSTRUCTION: Creditors to swap debt to equity
--------------------------------------------------------
Creditor banks of South Korea's Ssangyong Construction will switch 500
billion won (US$408 million) of outstanding loans to equity shares as part
of a work-out programme for the debt-ridden firm. The decision was taken
after Cho Hung Bank proposed at a meeting that part of Ssangyong
Construction's debt to the banks be switched. The total debt amounts to
1.42 trillion won. The creditor banks agreed last week to provide a fresh
loan of 85.6 billion won on the condition that majority shareholders would
inject 128 billion won into the firm but failed to agree on
how much of their loans they would convert to equity shares. (Asia Pulse
03-Mar-1999)


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

RENONG BHD: Renong to reveal revised rescue plan
------------------------------------------------
The Asian Wall Street Journal reported the Malaysian conglomerate Renong
Bhd will reveal details of its revised plan to restructure its debts in
about a week or so, once written conformation is received from the
government as to whether the plan has been accepted or not. This new plan
is reportedly being hammered out with Malaysia's Corporate Debt
Restructuring Committee, a new agency set up to restructure Malaysian
corporate debt.  

Earlier reports stated that this new plan reportedly features the group's
lucrative toll-road operator, Projek Lebuhraya Utara-Selatan Bhd. or PLUS
(the PLUS toll road that runs north and south along Malaysia's west coast).
Reports are that PLUS will issue 8.5 billion ringgit in bonds, and
creditors will receive a combination of cash and new bonds to cover
immediate commitments. Plus will repay the bonds using its revenue and
money that would otherwise be paid in taxes to the government. It does not
involve any government guaranteed bonds.

An earlier original plan from Renong was opposed by creditors because they
faced receiving as little as half of their money back, and the plan did not
impose any penalty on Renong's management. This plan was to have 10.5
billion rinngit of the Renong group's debt be replaced by  government
guaranteed bonds. The bonds would be paid off partly by revenue from PLUS
and partly from tax payments that PLUS would otherwise make to the
government. This first plan also called for the government to take a
stake in some other Renong public works projects, and the unlisted shares
of PLUS will be pledged as security.  

Last October Renong defaulted on interest payments and guarantee fees worth
421.4 million ringgit of revolving facilities, and a $147 million
transferable loan certificate. Renong owes local and foreign creditors
more than 28 billion ringgit in commercial debt, a number that represents
roughly 5 percent of all the loans in the Malaysian banking system.


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

BANGKOK LAND: To raise Bt2bn through fourth asset sale
------------------------------------------------------
Bangkok Land (B-Land), the country's largest land developer, will sell its
fourth lot of assets worth 2 billion baht to a foreign investor, and was
expected to conclude the deal this month, B-Land CEO Anant Kanjanapas said.

Anant refused to reveal the name of buyer, however, it was
expected to be the company's old partner, Asia Opportunities Fund.

B-Land previously sold three lots of its asset totalling 2.2 billion baht
to the Asia Opportunities Fund. The assets included land and condominium
units in Muang Thong Thani and its projects in the northern and eastern
parts of Bangkok.

The first and second lot sales had a combined value of 1.8 billion baht,
while the third lot was 400 million baht.
(Business Day [Thailand] 03-Mar-1999)


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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