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Taiwan Semiconductor Manufacturing Company Limited Message Board

  • nuevovida nuevovida Dec 10, 2004 3:13 AM Flag

    CAO INVESTORS GET NEW LIFE?

    "Mr. Hai made clear that he was aware how much would be at stake for China if it failed to forge a settlement perceived as fair by shareholders and creditors. He suggested that the parent wouldn't allow its subsidiary to go bankrupt."

    ..."How China handles the corporate-governance scandal that has erupted at CAO Singapore could affect the willingness of investors to buy shares in other overseas-listed companies controlled by Beijing."

    INVESTORS are praying for China's leaders to step-in and bring a quick solution to the CAO scandal!

    Maybe there is hope for CAO's INVESTORS.

    THIS would be a very POSITIVE move for China! IT would give back to INVESTORS the confidence that has been lost recently due to CAO's mess!!!

    ASIAN BUSINESS NEWS

    CAO Holding Denies
    Liability for Unit's Loss

    Official Says Parent Adopts
    A 'Responsible Attitude'
    In Fallout at Singapore Arm
    By MATT POTTINGER
    Staff Reporter of THE WALL STREET JOURNAL
    December 10, 2004; Page B2

    BEIJING -- The Chinese parent company of China Aviation Oil (Singapore) Corp. isn't legally liable for most of the huge losses accrued by its Singaporean subsidiary, said the parent company's Communist Party boss, the official Xinhua news agency reported.

    But the parent company is adopting a "responsible attitude" toward creditors and shareholders stung by the revelation last week that the subsidiary secretly lost more than $500 million in oil-derivatives trades, the official said.

    "Legally speaking, the Singaporean company is a limited-liability company listed in Singapore that should use its own assets to legally shoulder responsibility for its debts," Hai Liancheng, Communist Party secretary of China Aviation Oil Holding Co., or CAO Holding, said in an interview published by Xinhua yesterday. "The Singaporean company's debt crisis doesn't make CAO Holding jointly liable, nor does it make other companies affiliated to CAO Holding jointly liable," Mr. Hai was quoted as saying.

    His remarks were the most authoritative yet on how accountable the Chinese government believes it should be for the behavior of China Aviation Oil (Singapore), or CAO Singapore, which is the sole importer of jet fuel to China and is majority-owned by the Chinese government. How China handles the corporate-governance scandal that has erupted at CAO Singapore could affect the willingness of investors to buy shares in other overseas-listed companies controlled by Beijing.

    Mr. Hai made clear that he was aware how much would be at stake for China if it failed to forge a settlement perceived as fair by shareholders and creditors. He suggested that the parent wouldn't allow its subsidiary to go bankrupt.

    continued...

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    • All I try to say is: in the capitalist world, "anything good for the capitalists, then that must be good for the <common people in the street>". This is referred to the someone's previous post.

      Former Fed Reserve Vice-Chirman did make the initiative, Fed did force these investment banks to put out $250 million each to buy out LTCM, Fed Chairman Greenspan was very coopertaive all the way.

      These are books out there give very details of LTCM form the begining to the end.

      About the <common people in the street>; Sorry, kids, LTCM didn't want to manage the money from <common people in the street>, LTCM had strict rules to screen out whose money they wanted to manage. This is not the game you and I can play, Hehehe, kids!

    • sucker:

      LTCM is an interesting case. I am still not quite getting it. Are you trying to say that bailout for LTCM just because the former Federal Reserve Vice-Chairman was the partner of LTCM?

      -----

      "That's when LTCM, whose partners include former Federal Reserve Vice-Chairman David W.Mullins Jr., called the Fed. One source says LTCM first asked the New York Fed to force its banks to honor their commitments. In any event, the prospect of an LTCM failure brought swift attention from the Fed. ..."

    • LONG TERM CAPITAL MANAGEMENT'S:
      $3.5 BILLION TRANQUILIZER

      WHY THE FED TOOK A HAND IN CRAFTING AN LTCM BAILOUT PLAN

      The turmoil in global markets rolled into the New York Federal Reserve on Sept. 23. In an emergencymeeting at the stone fortress in the heart of the financial district, two dozen bankers from the world'sleading financial firms convened to prevent the failure of hedge fund giant Long Term CapitalManagement--and head off a possible market panic, say market sources. As a measure of the gravity ofthe meeting, Goldman, Sachs & Co.'s co-chief executive Jon S. Corzine and J.P. Morgan & Co.Chairman Douglas A. Warner III were there.

      LTCM, founded by former Salomon Inc. traders including John Meriwether, had already lost$2 billion of its $4 billion in the first eight months of 1998, and was facing liquidation due to hugelosses in fixed-income markets around the world. The plan, which was reached on the evening of the23rd, called for a consortium of major banks and investment firms to put up more than $3.5 billion innew equity for LTCM. In return, LTCM will give up control to an oversight committee that will runthe firm. Members will include representatives of Goldman Sachs, Merrill Lynch, Morgan StanleyDean Witter, Travelers Group, and UBS. ''We greatly appreciate the willingness of the consortium toprovide capital,'' Meriwether said in a statement.

      The hedge fund's crisis began around Sept. 18. Bear Stearns & Co., an LTCM lender, had askedthe fund to reduce trading positions because the value of bonds LTCM had pledged as collateral hadfallen, sources say. That forced LTCM to find new financing. The firm turned to a $500 millioncommitted credit facility that LTCM had lined up for just this situation, say market sources.But some of the banks in the syndicate balked at letting LTCM draw down their credit, say marketsources, because LTCM was close to defaulting on some loan covenants.

      That's when LTCM, whose partners include former Federal Reserve Vice-Chairman David W.Mullins Jr., called the Fed. One source says LTCM first asked the New York Fed to force its banks tohonor their commitments. In any event, the prospect of an LTCM failure brought swift attention fromthe Fed. ''This could spook the market if this thing went down and nobody did anything,'' says Roy C.Smith, a finance professor at New York University.

      On the evening of Monday, Sept. 21, a meeting was held at LTCM's Greenwich (Conn.)headquarters with its banks. The initial proposal was for the banks to cough up $250 million each tobuy LTCM for $4 billion, say market sources. Some balked, but others pressed for a quick resolution.Few traders missed the irony: Even as news of the bailout plan emerged on CNBC on the 23rd, FedChairman Alan Greenspan was warning Congress that the worsening global crisis required action bythe U.S. Both in public and behind closed doors.

      By Leah Nathans Spiro, with Gary Silverman in New York and Dean Foust in Washington


      More background:

      http://www.gata.org/long_term_capital.html

      http://www.mega.nu:8080/ampp/ltcm.html

      http://www.pbs.org/wgbh/nova/teachers/programs/2704_stockmar.html

    • continued..


      "CAO Singapore's now-suspended chief executive, Chen Jiulin, was arrested on Wednesday by Singapore police and released on bail without being charged. An eyewitness said Mr. Chen was at the police station again on Thursday, but police have declined to comment. "Investigations are in progress. It is not appropriate to comment on them," a police spokesman said.

      Singapore's High Court is scheduled to decide today whether to grant CAO Singapore an additional six weeks to present a restructuring plan to pay creditors, including Mitsui & Co., Sumitomo Mitsui Banking Corp., Fortis Bank SA and Barclays Capital, among others. Gu Yanfei, a company director, has asked the High Court to grant the extension because financial adviser Deloitte & Touche Financial Advisory Services needs more time to prepare the plan.

      In addition, the company's parent and Temasek Holdings Pte. Ltd., the Singapore state-owned investment company, still are discussing a possible $100 million rescue plan, Ms. Gu, who is spearheading the restructuring, said in an affidavit seen by Dow Jones Newswires.

      Mr. Hai of CAO Holding said that the parent company's total revenue from the beginning of the year to the end of November has exceeded 20 billion yuan ($2.42 billion), and that profit is close to 600 million yuan."

      ---- Kevin Lim and Hasan Jafri of Dow Jones Newswires contributed to this article.

      Write t

 
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