Macau keeps reins at Korea row bank

The caretaker committee in charge of Banco Delta Asia will remain in place for an additional six months, the Macau government said yesterday, raising further questions about the fate of the troubled lender.

The tenure of the three-member, government-appointed committee, which has managed the bank's daily operations since it was singled out by the US Treasury Department as a 'primary money-laundering concern' in 2005, was to have run out on March 29.

The decision appeared to contradict a claim by the bank's controlling shareholder and Delta Asia Group chairman, Stanley Au Chong-kit, that it would be returned to his control this month.

'It was the Macau government's promise to return the control of the bank by the end of March,' he had said. '[Secretary of Economy and Finance Francis Tam Pak-yuen] said we had not violated Macau banking regulations.'

Mr Au declined to comment.

The government's announcement, published yesterday in its official gazette, came as a North Korean boycott of six-party talks in Beijing stretched into a second day.

Negotiators are demanding the return of about US$25 million in frozen funds held in the bank's accounts. Officials from the US, Beijing and Macau on Monday signalled the funds would be released, but North Korean delegates have refused to resume talks pending the physical transfer of the money. It is not clear when that will happen.

Washington had blacklisted Banco Delta Asia from all links to US financial institutions. The decision was the result of an 18-month investigation by the Treasury Department of allegations it facilitated transactions related to North Korean counterfeiting of US currency, manufacturing of fake cigarettes and trading in illegal drugs. Mr Au had said the bank never knowingly accepted illicit funds.

By leaving Banco Delta Asia in the hands of the committee, Macau officials have allowed more time for the political dispute to be resolved before deciding the fate of the small, family-owned lender.

Should it decide not to return control to Mr Au, Macau law provides the government the option of maintaining official oversight, forcing a sale, temporarily closing its service counters, suspending its banking licence or launching winding-up proceedings.