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Banks refuse loan to Rebar-linked Eastern Multimedia

Eastern Multimedia Group (東森多媒體), which was spun off from the Rebar Asia Pacific Group (力霸亞太企業集團) in 2004, yesterday saw banks reject its applications for syndicated loans on concerns over its ability to repay them.

The banks lacked confidence in Eastern Multimedia, said Chen An-hsiung (陳安雄), spokesman of Taiwan Cooperative Bank (合作金庫銀行), the lead bank in a proposed NT$8.8 billion (US$268.5 million) syndicated loan to the company.

Chen said the banks were concerned about Eastern Multimedia's liquidity and had to engage in risk control to protect its assets, Chen said.

Eastern Multimedia had hoped the banks would partially finance the NT$15 billion required to build a headquarters in Guandu (關渡), Taipei.

Eastern Multimedia Chairman Gary Wang (王令麟), a son of Rebar Group chairman Wang You-theng (王又曾), reportedly wept when banks told him to his face that they would not make a loan to the company.

Chang Hwa Bank (彰化銀行) said they had opted out of the loan after evaluating the situation.

"We are conservative about Eastern Multimedia's financial situation," Chang Hwa spokesman Miles Chang (張明文) said.

Chang Hwa Bank and three other creditor banks will meet with Gary Wang this afternoon to negotiate the repayment of a NT$6.3 billion loan to Rebar affiliate Chia Hsin Food and Synthetic Fiber Co (嘉新食品化纖), for which Wang was guarantor.

Gary Wang said he would not attempt to shirk responsibility for the debts. He also said in a statement released yesterday he had canceled business trips to Hong Kong, Japan and the US. over the next three months.

The Financial Supervisory Commission said yesterday that deals signed between Rebar Group and Eastern Multimedia over the last 10 years would be investigated.

“We will pass the cases on to the prosecutors if we find any evidence of misconduct,” commission spokeswoman Susan Chang (張秀蓮) said.

The commission said it would work with market regulators such as the Taiwan Stock Exchange to strengthen the monitoring of listed companies.

Chang also said the commission had requested that the courts immediately inform it of any applications from publicly traded firms for restructuring or bankruptcy protection so that it can protect investors' rights and interests.
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