Hone Shee Group bounces checks worth NT$7 million

Ou Kun-shan (歐崑山), vice president of Hone Shee Development (鴻禧開發), yesterday said that the Hone Shee Group (鴻禧集團) issued two bouncing checks -- one with a value of NT$1 million in late May and the other with a value of NT$6 million on June 8 -- completely due to "error and oversight."

According to Ou, the group had absolutely not issued checks they knew would bounce in order to put pressure on banks.

Ou made the remarks in response to a Chinese language media report saying that two units of the Hone Shee Group -- Hone Shee Recreation Co (鴻禧育樂) and Hone Shee Development Co -- have bounced NT$7 million worth of checks, quoting banking sources.

Sources were quoted as warning that the creditor banks, Chinatrust Commercial Bank (中國信託商銀) and Fubon Commercial Bank (富邦商銀), may take legal action against the two companies if they fail to pay the sum immediately.

Hone Shee is also working on several new projects currently and therefore is asking for an extension of their loans by one year, at a lower interest rate.

According to Chinatrust's spokesperson Chung Lung-chi (鍾隆吉), Hone Shee Recreation has delayed interest payments for over six months. While Hong Shee has asked for a loan extension from the bank, Chung said that requesting a loan extension without any collateral, such as putting up its golf club memberships and other measures, is unacceptable by bank standards and may prompt Chinatrust to take legal action, if necessary.

Apart from Hone Shee Recreation and Hone Shee Development, the Lai Lai Sheraton Hotel, also owned by the Hone Shee Group, reportedly had been unable to pay employees' salaries. It is being rumored that the hotel has been facing financial difficulties for months, possibly because of losses incurred by the parent company in the real estate market.