MING PAO'S profit results for the year to March have been heavily qualified by auditors who question whether almost the equivalent of HK$300 million of loans and a deposit can be recovered. The company said yesterday that attributable profits had eased to HK$147.48 million from HK$159.85 million and turnover had risen to HK$1.23 billion from HK$930.7 million. Earnings a share were three cents lower at HK$0.41 and directors have recommended a final dividend of three cents a share, down from 10 cents last year. Analysts had predicted a slight fall in profits in line with high prices for newsprint and tough competition, but had been concerned by the delays in producing a profit and loss account. Ming Pao said earlier this month that it needed more time to obtain information over some loans and receivables. The announcement of the delay came after a press report saying the publisher's former chairman, Yu Pun-hoi, had defaulted on his second instalment for the purchase of a 13.5 per cent stake in the company from Ming Pao founder Louis Cha. Directors said yesterday that Ming Pao had agreed in April last year to lend HK$185.8 million to an unrelated mainland company at one percentage point over the Hong Kong interbank offered rate (HIBOR). In May, it had entered into a newsprint purchase agreement with a Japanese company under which it paid a US$10 million deposit to the Japanese company, which was due to pay Ming Pao interest of three percentage points over HIBOR, they said. Directors said the auditors had expressed concern over the recoverability of the loan and the deposit and the board was seeking improved security for both the loan and the deposit. The group had also lent US$2.5 million to 'an independent, unrelated third party'. Directors said also that the company had been owed HK$23 million by an 'independent, unrelated third party'. The first two instalments totalling HK$9.2 million were paid on time. The third instalment of HK$6.90 million had been due on July 30 but had not been paid and the final instalment of HK$6.90 million was due on October 30. Mr Yu, who resigned as chairman of the company in October last year after being publicly censured by the Hong Kong stock exchange for failing to disclose his criminal record, holds about 45 per cent of Ming Pao through CIM. In December 1993, CIM agreed to acquire 13.5 per cent or 48.49 million shares from Mr Cha in five equal tranches over a 36-month period.