Asia Pacific

The governor of Cyprus’s central bank has come out fighting in his escalating battle with the country’s president over the alleged mismanagement of the Cypriot banking crisis and bailout. Panicos Demetriades, who heads the Central Bank of Cyprus, told the Financial Times that his dysfunctional relationship with president Nicos Anastasiades was “not a sustainable state of affairs”, but insisted he would not resign. “I don’t think that would be the right thing to do,” he said.

Malaysian Prime Minister Najib Razak’s promise of measures to curb the budget gap and avert a credit rating downgrade helped send three-year government bond yields to a four-month low. His resolve is about to be tested, Bloomberg reported. Najib, also finance minister, will deliver his 2014 budget speech to parliament on Oct. 25 after cementing his leadership in a May general election.

Small and medium-sized companies continue to dominate insolvency statistics, with 80 per cent of failed businesses having fewer than 20 employees and less than $100,000 in assets, the Herald Sun reported. Creditors to these companies were also big losers, receiving a maximum of just 11c for every dollar they were owed, according to a new report by the Australian Securities and Investments Commission released yesterday.

A move by the Bank of Tokyo to challenge the Solid Energy debt restructuring deal could backfire, leaving the bank being owed even more money, says Finance Minister Bill English, The New Zealand Herald reported. A debt restructuring process aimed at rescuing the struggling state-owned coal miner Solid Energy was announced on October 1. The Auckland branch of Bank of Tokyo-Mitsubishi UFJ is recorded as the second-largest lender to Solid Energy and is opposing the proposed deal. Last week It lodged proceedings in the High Court in Auckland challenging the process.

Orient Corp., the Japanese consumer credit firm being probed for lending to crime groups with Mizuho Financial Group Inc., said it’s cooperating with police to prosecute gangsters who obtained loans fraudulently, Bloomberg reported. The company is in talks with lawyers to consider action against borrowers who signed 37 loan contracts by falsely declaring they have no mob ties, Orient said in a statement on its website yesterday. It is seeking to cancel the transactions.

The BNZ, Bank of Tokyo-Mitsubishi and TSB Bank are the Solid Energy lenders who will face the biggest "haircut" on monies owed by crippled state coal miner Solid Energy, Interest.co.nz reported. Bank of Tokyo-Mitsubishi is reported to be taking legal action to try to veto a debt restructuring deal. At this stage if it came to a straight vote (which requires a 'yes' from lenders holding 75% of the outstanding debt) it appears likely that it would be outvoted by other lenders.

The number of people seeking work in Australia fell to a seven-year low, signaling disillusionment with the shrinking opportunities in a resource-rich economy strained by a sharp slowdown in mining investment, The Wall Street Journal reported. Declining participation in the job market helped drive a surprise fall in the unemployment rate to 5.6% in September from 5.8% a month earlier—mirroring a trend in other major developed economies like the U.S., where the jobless rate has fallen as people choose to leave the work force.

The Chinese government has room to deal with rising debt levels, which has become a “serious concern,” according to Zhu Min, a deputy managing director at the International Monetary Fund. While debt accumulation by companies and local government is “way too high,” the government has a lot of “policy buffer,” including $3.5 trillion foreign reserves, to resolve the problems, Zhu, a former deputy governor at People’s Bank of China, said at a panel during the IMF meeting in Washington yesterday.

More than 100 smaller firms in South Korea could face debt restructuring this year on consecutive defaults by some large enterprises, the highest tally since the 2008 global financial turmoil, sources from creditor banks said Monday, the Yonhap News Agency reported. The Financial Supervisory Service (FSS) and creditor banks are in the final stage of drawing up a list of corporate debtors from 1,100 small and medium enterprises (SMEs), which owe banks loans worth no more than 50 billion won (US$46.7 million), the FSS and bank officials with knowledge in the matter said.

Redbank Power Station, the 151-megawatt coal-fired power station in New South Wales' Hunter Valley, has gone into receivership after negotiations on restructuring its $192.7 million of debt broke down as Redbank’s cash flow couldn’t meet its creditors' repayment schedule, the Business Spectator reported. Creditors have been in discussion with Redbank since 2010. “The operation of the power station will continue as normal,” a statement said.