Asia Pacific

Lending by lightly regulated financial companies outside China's formal banking system has ballooned this year, causing increasing headaches for the government in its efforts to manage the economy and control inflation, observers say, The Wall Street Journal reported. China's government has traditionally used its control of the largely state-owned banking sector to regulate the country's pace of economic growth, directing it to pump out cheap credit in good times and restricting the volume of new loans to prevent overheating.

Krispy Kreme Doughnuts Inc.’s Australian unit exited bankruptcy protection after winning approval of its restructuring from creditors, the company said, Bloomberg reported. Management and control of the unit reverts to the directors, Krispy Kreme Australia said in an e-mailed statement today. Creditors can file claims against a A$2.3 million ($2.2 million) fund that was approved as part of the restructuring and will probably receive 45 cents for each dollar they’re owed, the company said.

Australia’s economy slowed to a crawl in the September quarter, The Australian reported. The economy was caught in the transition from the government's economic stimulus package to the revitalised commodity boom. The economy expanded by just 0.2 per cent, half as fast as expected, with the breaking of the drought and higher export prices saving the national accounts from plunging into the red.

The developer Al Murjan's move to file for bankruptcy will set important precedents in the UAE, in a case that will be closely watched by thousands of investors in uncompleted projects, The National reported. The court's decisions in the case could create a framework for what investors and other creditors can expect if other property developers go under. Although there are federal laws covering bankruptcy, legal experts say they have almost never been tested.

Japan Airlines Corp. said Tuesday that a court had approved its restructuring plans—more than 10 months after the struggling airline filed for Japan's biggest-ever nonfinancial bankruptcy protection, The Wall Street Journal reported. JAL will now move to implement steps toward its lofty goal of posting its highest-ever operating profit within three years as set under the restructuring plan. "We are grateful to be given the opportunity to rehabilitate," said JAL President Masaru Onishi, apologizing to investors for the inconveniences of bankruptcy and share delisting.

Government-guaranteed finance company Equitable Mortgages called in receivers Friday, The New Zealand Herald reported. The Auckland-based financial institution has around 6000 depositors and approximately $178 million in Crown-guaranteed deposits. Eligible depositors with Equitable Mortgages can claim repayment from the Crown, Treasury's deputy secretary of financial operations Phil Combes said yesterday.

Grain company Keith Seeds has sold its assets to NZ company PGG Wrightson and entered voluntary administration, AdelaideNow reported on a story in The Advertiser. The company has an estimated $7 million in debt. PGG told the New Zealand stock exchange yesterday it completed the purchase of the assets of Keith Seeds on Monday, for an undisclosed sum. The company will use Keith Seeds as a base to expand its existing South Australian operations. But the transaction could leave an estimated 200 suppliers out of pocket by $7 million, with no assets against which to claim.

A cabin crew union of Japan Airlines Corp decided against a strike, despite being granted the right to strike by its members in a vote that began as a protest against planned layoffs, the Nikkei business daily reported. Of the 870 union members, 97 percent cast votes, out of which 89 percent supported a strike, the report said. JAL has about 5,400 flight attendants and most of them belong to a different union that is the airline's largest, the Nikkei said. The union contends that members were able to express their collective will through the vote itself, the daily said.

Providing assistance to struggling parts of the economy could force up interest rates and the value of the Australian economy, Ken Henry has warned. The Treasury secretary, appearing before a senate committee this morning, said the Australian economy could be undergoing a permanent structural change as a result of the mining boom, The Australian reported. The best policy response might be to assist the transition rather than prop up industries facing less prosperous futures.

Andrew Krukziener’s date with creditors has arrived. The Auckland developer, $47 million in debt, is expected to give evidence at the High Court at Auckland as he seeks to avert bankruptcy, The National Business Review reported. The hearing began yesterday when the court heard details of his proposal to repay creditors $350,000 in instalments over four-and-a-half years. The IRD, which claims it is owed $6.67 million by Krukziener, is opposing the proposal and wants to press ahead to have him declared bankrupt. Eighteen other creditors have accepted the proposal.