The Third Forum for Asian Insolvency Reform (FAIR) Progress Emergency measures The disposal culture Markets changing Pitfalls The Hole Diversified stakeholders Multilateral criteria Lampros Vassiliou OECD Lead Consultant for Asian Insolvency New email: [email protected]Regional Tour Insolvency Pizza The Implementation Gap Bubble risks Incentives
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The Third Forum for Asian Insolvency Reform (FAIR)
The Third Forum for Asian Insolvency Reform (FAIR). Lampros Vassiliou OECD Lead Consultant for Asian Insolvency. Progress. Pitfalls. Insolvency Pizza. The Hole. The Implementation Gap. Diversified stakeholders. Incentives. Bubble risks. The disposal culture. Emergency measures. - PowerPoint PPT Presentation
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• Death of the Financial Sector Restructuring Authority (FRA) and Corporate Debt Restructuring Advisory Committee (CDRAC) + Birth of the Thai Asset Management Corporation (TAMC)
• Proposals to amend the Bankruptcy Act – still at large
• Plight of planners and the TPI case - no appeals
• Tricks + loopholes – SSM, Natural Park, Tanayong
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Lampros Vassiliou
Indonesia
• Commercial Court – Team 7
• Jakarta Initiative Task Force (JITF)
• Indonesian Bank Restructuring Agency (IBRA)
• Manulife saga
• APP – Indonesia and China
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Lampros Vassiliou
Philippines
• 1981 - 2000 SEC sojourn
• Transfer of jurisdiction to courts
• Reality of distressed and acquired assets
• Proposed Corporate Recovery & Insolvency Act
• Corruption of Special Purpose Asset Vehicles
• Lack of investor interest
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Lampros Vassiliou
Chinese Taipei
• Bulk Sales of NPL portfolios – hot, hot, hot last year
• Financial Institution Merger Law – bank mergers
• New Rehabilitation Law – March/April 2004 election – put reform on back burner
• Taiwan Asset Management Company
• Financial Restructuring Fund – expanding role beyond insolvent banks
New Foreign Invested Enterprises – Enterprise Committee
• New Rehabilitation Law - Radical Changchun approach
• Four asset management companies – provincial barriers – activity started but slow - RMB flotation overwhelming issue – put NPLs on back burner
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Lampros Vassiliou
Hong Kong
• No rehabilitation law
• Companies (Corporate Rescue) Bill – 30 day moratorium – provisional supervisor – employee priority – insolvent trading – still dormant
• Back door listing industry
• Chinese window companies
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Lampros Vassiliou
Korea
• Agreement for the Promotion of Corporate Workouts• New Corporate Restructuring Promotion Law (CRPL)
• Korean Asset Management Corporation (KAMCO) – no limited life – role being redefined - buying housing loans and credit card ports now – 1200 employees
• Redefining of provisioning rules ended securitizations – true sale – recourse or guarantee clauses in ABS
Korea (cont)
Lampros Vassiliou
Korea (cont)
• CRVs and REITs – CRC Industry – questionable – manipulation of stocks
• SKG Global - fraud
• New proposals for consolidated laws – individual rehabilitation and UNCITRAL
• Reckless lending – credit cards
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Lampros Vassiliou
Malaysia
• Bank Mergers – how many anchor banks?
• Secret to success of CDRC – August 2001 revamp
• Danaharta / Danamodal – Dato Azman
• Danaharta – clear procedures – only 3000 odd accounts – special powers challenged – resolution not disposal – loan repaid early - bonds being redeemed – only one securitization – 58% recovery rate
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Lampros Vassiliou
Japan
• Long term economic slump- Detailed insolvency & restructuring procedures – effective courts
• Resolution and Collection Corporation (RCC) – similar to Thai old AMC – very bad portfolio - will need similar orgs after IBRA, Danaharta – loan sales must cover purchase price = problem as land price decline
• Industrial Revitalization Corp of Japan (IRCJ) – banks reluctant due to valuation – only 6 debtor corps Japan (cont)
Lampros Vassiliou
Japan (cont)
• Deposit insurance – March 2004 lift full blanket – April 2005 – limited coverage – Japan example to region in this experience
• Need turnaround experts
• Resona Bank – example of financial crisis management – DICJ bought stock – replaced management