Asia Pacific

How bad is the debt problem in South Korea? There are some new numbers that provide clues, The Wall Street Journal Korea Real Time blog reported. More than 1 million Koreans, or about 4% of the economically-active population of 25 million, once joined in or are currently working with personal debt workout programs, the Credit Counseling & Recovery Service says. The non-profit agency started the program called “Personal Workout” in October 2002 in order to help people resolve their debt problems and regain their credit.

The government is setting up a company to manage the recovery of the remaining assets of six finance companies placed in receivership while they had Crown guarantees, The National Business Review reported. "Right throughout the Retail Deposit Guarantee scheme the Government has sought to minimise disruption to the economy, while reducing the cost to taxpayers," Mr English says. "The receiverships of these six firms have reached the stage where all the readily marketable assets have been sold.

Bridgecorp renewed investment offers to the public despite directors being aware the finance company had been missing interest payments to securities holders, the Crown argued this morning, The New Zealand Herald reported. The High Court this morning also heard Bridgecorp staff were told to lie to investors calling up asking where their payments were.

Troubled Swedish car maker Saab Automobile AB edged closer to bankruptcy after it said it had terminated rescue funding agreements with Chinese auto makers Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co., though the three companies remained in talks, The Wall Street Journal reported. Saab is restructuring its operations under creditor protection and is trying to avoid being closed, after the administrator of the restructuring process on Friday moved to have the company thrown out of receivership and declared insolvent.

Households are sinking under a sea of debt and threaten to take the country’s fragile economy down with them. Policymakers are rightfully alarmed, but their scrambling appears to be pushing families further into the abyss rather than keeping them afloat, The Korea Times reported in a commentary. Under enormous pressure to navigate the country out of this mess, officials at the Financial Services Commission (FSC) and Bank of Korea (BOK) are trying their hardest to put on brave faces and claim the current levels of indebtedness are broadly manageable.

Mortgage broking group Refund Home Loans has been placed in administration, but several buyers are considering acquiring the business which has more than 350 franchisees and a substantial stake in the growing alternative home loan market, SmartCompany.com.au reported. The announcement comes just 18 months after the Australian Competition and Consumer Commission slammed the company and Ormond, after he admitted making false and misleading statements to franchisees about an agreement with the ACCC itself.

A scramble to retain customers pulling their money from traditional deposit accounts is causing Chinese banks to use a growing number of alternatives that regulators fear could undermine the financial underpinnings of the economy, the Financial Times reported. China places a ceiling on deposit rates as a way of limiting competition among banks and to fortify the capital positions of institutions that had effectively been insolvent a decade ago.

Beijing is not pleased with the signals that the market for Chinese bank shares is sending about bank fundamentals or the state of the economy. So it is doing what it usually does with information it doesn't like: Cover it up. Central Huijin, an arm of China's sovereign wealth fund that is in turn an agent of the State Council, has started buying the shares of Chinese banks listed in Shanghai and Hong Kong to pump up prices, The Wall Street Journal reported in a commentary. If Japan's "price-keeping operations" are anything to go by, this will only work for a short time.

Taranaki baking business Yarrows (The Bakers) has been sold by receivers BDO to a member of the founding family, John Yarrow, The New Zealand Herald reported. He had originally sold his stake to his brother Paul in 2005, resulting in a legal fight within the family when Paul took him to court over a purchase price he alleged was too high, before settling out of court. The sale, which also includes a solvent Rotorua company, Gilles Bakery, was for an undisclosed sum and follows a five-month search for a buyer by accounting firm BDO, which was appointed receiver in May.

A Goldman Sachs-led consortium continues to be frustrated in its attempts to secure control of the hotels group Redcape Property Fund, The Australian reported in a commentary. The consortium can get events of default under the fund's banking facilities, but it just cannot get a default notice served, which would trigger a requirement for the default to be remedied or the fund would face almost certain administration and receivership, a possibility that may give the consortium more leverage in negotiating with Redcape's bankers, in particular ANZ.