Asia Pacific

Some of China’s struggling auto makers, burdened by debt, may be forced into involuntary bankruptcy, the Ministry of Industry and Information Technology said last week, Forbes reported. The Ministry said in a note published on Tuesday that it is considering the introduction of a withdrawal mechanism to force near-bankrupt automakers out of the bloated automotive industry. China has around 1,300 automobile makers, including 171 car, truck and bus makers and more than 900 specialty vehicle manufacturers, according to the government.

China's statisticians get a tough press. After all, it was Europe, not China, whose fudged public finance data helped usher in the latest round of global financial turmoil. The biggest corporate fraud in recent memory isn't China's Sino-Forest, but America's Enron, The Wall Street Journal Heard on the Street blog reported. But a secretive single-party state claiming rapid growth as the rest of the world hovers on the brink of recession naturally arouses suspicion. The official numbers show growth in China's gross domestic product at 7.6% year-on-year in the second quarter.

Two Chinese private equity funds are closing in on a deal to buy the asset management arm of Dexia, highlighting the interest of Asian buyers in European financial assets as banks look to restructure in the wake of the financial crisis, the Financial Times reported. If the sale of the business for about €500m is completed, it would mark the last stage of a break-up of the twice-bailed-out Belgo-French bank, one of the biggest European victims of successive financial crises during the past four years.

Defence technology company Metal Storm has been placed in voluntary administration. The company today said it had appointed Adam Shepard and Adam Farnsworth of Dean-Willcocks Shepard Recovery & Strategy as administrators, The Sydney Morning Herald reported. Metal Storm said it was hoped its business could be restructured or sold as a going concern. No details were given about the future of the company's workers.

Platinum Australia (PLA), the ASX-listed platinum miner with all its operations in SA, has now sought refuge from its creditors in voluntary administration. That means there could be some assets up for grabs for mining companies still in the ring, the Financial Mail reported. One of those is African Rainbow Minerals (ARM), Patrice Motsepe's diversified mining company, which is PLA's partner in the advanced Kalplats exploration project, 330km west of Johannesburg.

Higher loan-loss provisions by banks and greater "sacrifice" by founders or controlling shareholders of troubled companies are among the tighter norms for loan restructuring recommended by a panel appointed by India's central bank, Reuters reported. Banks should set aside 5 percent of total assets for standard loans that are restructured, up from 2 percent currently, while provisions for loans that are already restructured should be increased to 5 percent in a phased manner over two years, the report said.

The government said Thursday that it will step up efforts to support low-income households suffering from snowballing debt by offering them more low-cost financial products, The Korea Times reported. To that end, the Financial Services Commission (FSC) has decided to increase the amount of financial products tailored to the poor to 4 trillion won from the current 3 trillion. The new measure is aimed at reducing the financial burdens of low-income families to prevent them from becoming the epicenter of a household debt crisis.

Woori Financial Group audited its biggest subsidiary Woori Bank for two months, according to officials Wednesday, The Korea Times reported. The holding company found 30 insolvent loans worth 10 billion won from May 7 to July 6, and plans to punish those who authorized them. It is rare for a holding company to audit its subsidiary for over 40 days. The nation’s largest financial group said the move was due to the increasing number of nonperforming loans from Woori Bank compared to its counterparts and the company was concerned that its share prices would decline.

The owners of equipment rental company HireQuip have been placed in receivership and the operating business is being prepared for sale, according to KordaMentha, The New Zealand Herald reported. The receivership comes less than a month after HireQuip director Rob Nichols was quoted saying the company could seek a listing on the NZX as earnings recovered. HireQuip's parent shareholding companies Pacific Equipment Solutions, PES Finance and Hire Equipment Group are the entities placed in receivership, KordaMentha's Brendon Gibson said.

Alarm bells are sounding over the collapse in consumption, according to official figures that show high-income earners tightening their purse strings, The Korea Times reported. Sales at discount chains like E-Mart, Lotte Mart and Home plus plunged 7.4 percent year-on-year in June, the sharpest drop in 16 months, after being hit with a double-whammy of less spending and business-hour restrictions imposed by the government. It was the third consecutive month of revenue decline for the retailers, following a 5.7 percent drop in May and a 2.4 percent fall in April.