Asia Pacific

It has been billed by the British government as “a turning point” in the battle against tax evasion and avoidance. When world leaders gather in Northern Ireland next week, they will set out to end tax havens and stem the illicit flow of funds out of some of the world’s poorest countries, the Financial Times reported. The agenda – focused on the ‘three Ts” of trade, tax and transparency – is both technically and politically challenging.

New rules to reduce risk in China’s financial sector and clamp down on illegal capital flows last month took some of the heat out of what had been a torrid year for borrowing, The Wall Street Journal China Real Time blog reported. But amid worries that a slowdown in lending could be risky as the economy also slows, some are asking why lending had been so strong to begin with.

Slower Chinese inflation in May, combined with below-expectation bank lending, added to a downbeat picture of the world’s second-biggest economy in the current quarter, following the release of new data Sunday, the Irish Times reported. China’s economy grew at its slowest pace for 13 years last year, and so far this year it has failed to register a significant upturn, prompting downgrades from some economists who fear the country would even fall short of its annual growth target of 7.5 per cent.

Two Thai business tycoons, one a politically connected Chinese speaker, the other the son of a street vendor, have spent $27 billion on acquisitions in the past year, mainly abroad - more than all Thai firms spent overseas in the previous three years. The billionaires - 74-year-old Dhanin Chearavanont and Charoen Sirivadhanabhakdi, five years his junior - personify Thailand's bull market and Asia's frothy credit, feeding on fast, cheap loans bolstered by a surging local currency.

STX Pan Ocean, the dry bulk carrier unit of Korea's STX Group, is likely to file for court receivership, following a couple of failed attempts by its parent to sell a stake. Receivership is similar to U.S. Chapter 11 bankruptcy, where the court takes a leading role in restructuring the company. A judge at the Seoul Central District Court told The Wall Street Journal that once a company files for receivership, the court freezes the firm's assets, including its debt. It typically takes four months for a court to set up a restructuring plan, he said.

Central bank forum the Bank for International Settlements laid out a blueprint on Sunday for how to recapitalise a major lender in the event of a failure, seeking to avoid the sort of chaotic ad hoc rescues seen since 2008's financial crash, Reuters reported. Authorities have been grappling since the collapse of U.S. investment bank Lehman Brothers five years ago with the question of how banks regarded as systemically important - or too big to fail (TBTF) - can be recapitalised without causing panic and without needing taxpayer cash.

The Bangko Sentral ng Pilipinas (BSP) has foreclosed a 38-year-old rural bank that caters mostly to small and medium-scale enterprises in Bulacan, due to insolvency, the Philippine Daily Inquirer reported. The BSP has placed the Cooperative Rural Bank of Bulacan (CRBB) under receivership of the Philippine Deposit Insurance Co. (PDIC) since May 24. Affected are CRBB’s main office here and its branches in 13 towns and cities in the province. The Inquirer learned that CRBB had a P79-million debt to the Small Business Guarantee and Finance Corp.

Five years after the global financial crisis, South Korean construction workers are feeling the pinch more than ever as they shoulder a mountain of debt from a real estate bust that has cast a long shadow on the country's growth prospects, Reuters reported. Facing the spectre of bankruptcy, some construction firms persuaded their staff to take up loans to mop up unsold apartments. "There was pressure. There's nowhere else in the world where there's a parallel to these practices," said a construction worker, who declined to be identified due to the sensitivity of the matter.

Following last week's brief jump in Japanese government bond yields that helped precipitate a sudden slide in Tokyo stocks, an advisory panel to Japan's finance minister published a report Monday urging the government to undertake serious fiscal reform to avoid further rises in yields, The Wall Street Journal reported.

Local creditors of Wuxi Suntech, the bankrupt unit of Chinese solar panel maker Suntech Power Holdings Co Ltd, on Wednesday claimed the subsidiary owed them a combined $2.5 billion, at the start of a debt restructuring process expected to last months. Wuxi Suntech, the biggest subsidiary of New York-listed Suntech Power, filed for bankruptcy protection in China in March, five days after its troubled parent company defaulted on a $541 million dollar convertible bond.