Asia Pacific

A Chinese property developer owing 3.5 billion yuan ($566.52 million) to banks and individuals is teetering at the edge of insolvency, and its owner has been detained for illegal fund-raising, domestic media reported, citing local officials, Reuters reported. Zhejiang Xingrun Real Estate Co, based in Fenghua in eastern Zhejiang province, owes 15 domestic banks 2.4 billion yuan, state-owned China News Services reported. The company illegally raised most of the remaining funds from 98 individual investors, according to the report on Monday. Private fundraising is common but illegal in China.

Mizuho Financial Group is set to bring Japan's first overseas new-style bank capital instrument, testing investors' stance on the country's unique interpretation of loss-absorption rules, Reuters reported. Unlike other jurisdictions, where regulators prioritise investor bail-ins before injecting public money into a bank, Japan has legal provisions that could reduce the possibility of bondholder losses in the event an institution gets into trouble.

A 22-member lenders' consortium led by ICICI Bank has failed to agree on a proposal from ABG Shipyard to recast its Rs 11,500-crore loan, a majority of which turned into dud assets on their books, sources said here today, the Economic Times reported. "There was no consensus on the terms of the loan restructuring proposal from ABG Shipyard at the corporate debt restructuring cell meeting held last Friday," a senior official of a state-run bank told PTI today, adding that banks are not sure about the promoter's ability to bring in fresh equity contribution of around Rs 300 crore.

Last week a failure by Shanghai Chaori Solar Energy to meet interest payments on its debt became China’s first onshore corporate bond default, prompting some alarmed and alarming talk about a wave of defaults across China, Forbes reported. The phrase ‘Bear Stearns moment’ was used (by Bank of America Merrill Lynch among others), suggesting, presumably, that one default would cause investors to take flight from the entire Chinese corporate debt market and so cause a run on the whole sector, leading to a major crash.

A disproportionate number of ACT companies, including those in construction, are going broke because they are under-capitalised, according to liquidator Eddie Senatore, who has more than 25 years' experience in insolvency, The Canberra Times reported. This occurs when a company cannot afford operational expenses because of a lack of capital. For the ACT, the problem accounts for 16 per cent of insolvencies, almost twice the national average at 9 per cent.

The world’s most-profitable banks have never been so unloved by stock investors, Bloomberg News reported. China’s four-biggest lenders, which reported $126 billion of earnings in the 12 months through September, sank to the lowest valuations on record in Hong Kong trading yesterday. The MSCI China Financials Index dropped to an almost decade low versus the global industry benchmark while the market value of Industrial & Commercial Bank of China Ltd., the nation’s largest lender, fell below net assets for the first time on March 12.

Two months before Mt. Gox filed for bankruptcy it was sued by a customer seeking the return of funds in a case that highlights some of the red flags raised in the run-up to the collapse of what was once the world's biggest bitcoin exchange, Reuters reported. New York resident Marko Simovic filed a civil action at the Tokyo District Court on Dec. 24, seeking to recover $105,000 he had on deposit at Mt. Gox and about $14,000 in interest, court filings show. Simovic, who described himself as a software developer who previously managed the bitcoin operations for a hedge fund, said Mt.

A federal judge in Chicago froze the U.S. assets of the chief executive of Tokyo-based Mt. Gox as part of a customer lawsuit against the defunct bitcoin trading exchange, The Wall Street Journal reported. Separately, regulators took steps to gain greater control of the fledgling virtual currency and protect consumers from bitcoin scammers.

China's central bank is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves, sources involved in internal policy discussions say, Reuters reported. A cut would be triggered if growth slips below 7.5 percent and towards 7.0 percent, they said, and would come on top of money market operations and currency intervention via state banks that traders say has already loosened monetary conditions.

Indian PV manufacturer Indosolar has asked to have its debt restructured because it says low equipment prices mean it is unable to make a profit, PV-Tech reported. In a stock exchange filing last week, the Indian company said one of its plants, a 160MW plant in Greater Noida, Uttar Pradesh, had been idled because the high cost of production against the low prices for PV cells “did not yield margins”.