8
special
1
1
S3
v-n
C3
Qj
WHAT'S NewS Issue 4 Apn 1998
Singapore's general
manager Roelf
Hagoort, only too
aware of the effect
of the crisis
loans. The head of Goldman
Sachs (Asia) LLC's regional
research is predicting a peak of
possibly 25 percent in non-
performing loans. 'Malaysia is
like Thailand in that it hasn't
digested all the pain,'
comments Roelf Hagoort,
Singapore's general manager.
'We have no problem yet in
Malaysia, but we have to be
very, very cautious there. We
expect Malaysian banks to get
into difficulty. A lot of their
customers are borrowing
secured by property whose
value has dropped by more
than 50 percent.'
GREY AREA
With Klaas-Evert, our people
in the regional office at
Singapore are watching
developments in Malaysia
carefully but there is not a
Thailand
Malaysia
Indonesia
dedicated work out team in
place for that country. 'We
have set up two teams,' says
Ban Aik. 'One for Thailand,
the other for Indonesia. Both
comprise a negotiator, an
analyst and legal counsel.
We've put top people to work
in these teams - Seen Tiat How
is managing the Thailand
team. He is actually our head
of syndications. Peter Tang is
also highly experienced. He is
handling Indonesia in close
cooperation with the team in
Jakarta.' One of the major
problems confronting the
teams and our people on the
ground is a lack of legal
recourse in cases of default;
essentially, bankruptcy laws
are a vague, grey area. It is not
that the legislation does not
exist, it is almost
unenforceable. US and
Kuala Lumpur
European colleagues may be
surprised, but that's the
bottom line in these newly
emerged economies.
NO RECOURSE
'It's a real hindrance,' confirms
Seen Tiat How, 'we have no
real legal fallback so you're at
a big disadvantage. As far as
possible banks will try to
achieve a negotiated settlement
because there is almost no
would be better to keep
operations going - in the case
of a viable business - and then
within maybe five to seven
years, you will have some
return.'
REAL INTEGRITY
Among the team members
we're talking to is Sophia Kan.
All three are able to shrug their
shoulders at the foibles of
finance in the region. But in
Peter Tang - part of
Indonesia's work out
team
Managing the
Thailand work out
team - Seen Tiat
How
point taking a defaulter to
court.' Peter picks up: 'It's a
problem we keep running into.
If you take the company to
court it might take five to
seven years before you get a
judgment - if you get one at
all. And whatever you recover
will probably go to legal fees.
Then there's currency
depreciation. So rather than
trying to bankrupt the guy, it
addition to the practical
banking perspective of
recovering debt, all feel
personally more comfortable
with a negotiated structure to
keep the company going. 'It's a
very painful process to see this
happening to people who have
often worked all their lives to
build up something, only to see
it collapse,' comments Peter.
'What I find most touching is
