Asia Pacific

Mutual Finance is the latest finance company to be investigated by the Serious Fraud Office. The SFO said it began the investigation (under part II of the SFO Act) on December 23, after considering information obtained from Mutual Finance's receiver and from the National Enforcement Unit, The National Business Review reported.

China supports Spain's economic reforms and will continue buying Spanish government debt, Chinese Vice Premier Li Keqiang wrote in a newspaper editorial, the latest sign of China's growing role in protecting the stability of the European Union, its largest export market, The Wall Street Journal reported. Spain has faced increasing difficulties in financing a yawning budget deficit after Greece's financial meltdown in early 2010 sparked concerns about the problems of other fiscally frail euro-zone countries.

The new chairman of South Korea's financial regulator said the government will act sternly against financial-market disruptions or distortions and ensure systemic stability, the Wall Street Journal reported today. The comments come as Seoul takes steps to protect the domestic market from risks posed by rapid foreign capital flows into and out of the country. "The government will respect the financial industry's autonomy and provide the grounds that will allow the industry to develop on its own," Financial Services Commission's Kim Seok-dong, who officially assumed his post today.

China’s inflation may cool after manufacturing growth slowed in December because of a tighter monetary policy and the closure of energy-wasting and highly polluting factories, Bloomberg News reported today. Premier Wen Jiabao is seeking to limit bank lending and inflows of capital that could fuel inflation after a record expansion in credit drove the nation’s recovery. The central bank raised interest rates on Christmas Day and, six days later, the currency regulator said it was expanding a program to let exporters keep revenue overseas.

A senior Hero Group executive has been arrested for allegedly receiving a part of more than 3 billion rupees ($67 million) believed to have been misappropriated at a Citigroup Inc. bank branch on the outskirts of New Delhi, the Wall Street Journal reported today. The executive, Sanjay Gupta, allegedly got about 200 million rupees, said Assistant Commissioner of Police Dalbir Singh. A court has allowed the police five days custody of the employee for questioning.

Japan Airlines Corp is privately placing stock with its top executives as the bankrupt carrier looks to boost accountability and reduce its tax burden, the Nikkei business daily reported. About two dozen top executives, including President Masaru Onishi, took part in a recent offering, with each investing several hundred thousand yen. The combined stake comes to less than 1 percent, the paper reported. JAL needed to have multiple shareholders since a wholly owned subsidiary cannot adopt consolidated taxation, it said.

There was plenty of Schadenfreude when, in late 2009, Dubai was forced to admit it had trouble paying its debts. The brash emirate’s Gulf neighbours quietly hoped to tempt bankers and business people to their rival financial hubs. Now, irritatingly for many, Dubai is showing signs of recovery, The Economist reported. A $10 billion bail-out by Abu Dhabi staved off the threat of a big default. The emirate returned to the bond markets in September. Although the issue was unrated, it was heavily oversubscribed. So what’s the worry? One concern is how Dubai will meet its future payments.

Korea Asset Management Corporation (KAMCO) will buy about 5 trillion won ($4.38 billion) worth of bad loans from financial institutions and assets from companies under restructuring this year, local media said on Sunday, Reuters reported. The planned purchase amount is a third of KAMCO's purchases set for 2010 a year earlier. South Korea's news agency Yonhap quoted KAMCO Chairman and Chief Executive Chang Young-chul as saying that KAMCO would buy 3.5 trillion won worth of bad loans from savings banks and one trillion won worth of bad loans from commercial banks.

Growth in Chinese manufacturing activity slowed this month for the first time since July, an industry survey showed, but the reading remained relatively strong and analysts predicted further inflation-fighting measures from the government like interest-rate increases and currency appreciation, the Wall Street Journal reported today. The HSBC China Manufacturing Purchasing Managers Index, a monthly gauge based on a survey of executives, also showed that prices for factory inputs rose in December at their slowest rate in three months.

Indonesia said that it will tighten rules on banks’ foreign-exchange holdings and overseas borrowing to cope with capital inflows that have pushed up inflation and strengthened the rupiah this year, Bloomberg News reported today. Bank Indonesia will also reintroduce a 30 percent cap on lenders’ short-term overseas borrowing to minimize the risk of sudden capital outflows, it said yesterday. Banks must set aside 5 percent of their total foreign-exchange holdings as reserves as of March 2011, from 1 percent currently, Deputy Governor Budi Mulya said yesterday.