THE quote of the week comes from Akira Fujita, Daiwa Bank president, who told a press conference the bank had suffered a loss of US$1.1 billion. 'We really believed in him,' Mr Fujita said. 'He created a system where he was in charge of everything.' The runner up quote comes from Howard Matthews, a mathematics professor and adviser to foreign students, who told reporters: 'He was a good student, a personable chap - and clever, too.' Who are they referring to? Bill Clinton? Ross Perot? Anyone who isn't Bill Clinton or Ross Perot? No, the person in question is Yoshihide Iguchi, whose first job was working for a car-dealer, but hit his stride working for Daiwa Bank, the world's 19th largest. According to Daiwa, Mr Iguchi - now a former employee charged in the US with forgery and falsifying bank records - has admitted unauthorised trading of US Treasury bonds. The alleged offences supposedly started 11 years ago with a loss of US$200,000 which ballooned into a total loss of US$1.1 billion. And derivatives were not involved. The losses occurred, apparently, trading the most liquid, safest, bluest of blue chip debt securities in the world - US treasuries. Everyone knows derivatives are risky, but not many people have lost their shirts on US treasuries; at least not to this degree. Move over, Nick Leeson, you could be dethroned - or at least bumped off the front pages - if Mr Iguchi is found guilty of the charges. If you want a penpal, Mr Iguchi, presumably out on bail, is thought to be back at his home in Kinnelon, New Jersey, about 50 kilometres northwest of Manhattan. Shares of Daiwa Bank, dived 6.6 per cent the day after the bank revealed the losses. Meanwhile, debt-burdened Japanese banks - according to one estimate they're carrying about 65 trillion to 70 trillion yen in bad and doubtful debts - continued their campaign to win the hearts and minds of Japanese depositors. With a one-year bank deposit yielding only 0.3 per cent, Japan's banks are launching autumn campaigns to attract deposits. In July, Sakura Bank launched a new deposit called Can, offering a yield 10 basis points higher than market rates and allowing depositors to withdraw their funds after a month. Sanwa Bank plans to offer aprons to every depositor who opens a five-year Superfree account. They've got our vote. Cathay Pacific would prefer to forget this week. First it was hit by the announcement that Qantas had reached agreement with Macau for two Australian airlines to operate scheduled flights to the new Macau airport, which is due to open within two months. The following day it was hit with the news that Canberra had delayed its talks with Cathay on routes and is beefing up the negotiating team. Now Hong Kong's carrier is between a rock and a hard place - the Australians have the Macau trump card as an alternative, and Hong Kong's flag-carrier only has . . . er, New Zealand. Shareholders in Henderson Land probably broke out the champagne this week after the company announced a dollar-a-share cash bonus on the back of $7.02 billion earnings, up 16.4 per cent for the June 30. This came on top of a final dividend of $1.30 a share which followed an interim of 50 cents a share. Henderson paid out a similar bonus in 1994 after a 50 per cent leap in profits, and the latest result, while below last year's, was still respectable, and comfortably ahead of market expectations. Over the whole property sector, Henderson Land's profits have been the fastest-growing for a couple of years, but not the biggest. Henderson chairman Lee Shau-kee and his family are now richer to the tune of $3 billion, thanks to the $1.08 billion from the $1 per share cash bonus payout, $1.41 billion from the $1.30 final dividend and $544 million from the interim dividend. Mr Lee can look forward to further largesse from Sun Hung Kai Properties, which releases its results next week. MKI Corp was saved at the foot of the gallows this week after shareholders voted in favour of a rescue plan by Wingfoong Investment, rejecting a plan offered by China-backed Wing Hing Holdings. At a meeting this week, MKI shareholders attacked its old management for deals in 1993 which led to the company's assets diving in value from $160.7 million to $7.7 million. Not bad for a year in which it was virtually impossible not to make money in Hong Kong. That was the year that HSBC Holdings ended December 31 (over a 361-day period) showing a comparative return of around 178 per cent, Henderson Land returned 331.33 per cent . . . and MKI showed a minus 16.67 per cent return for the 360 days to December 30. Posting a negative return after a year in which brokers were bathing in champagne and the Hang Seng Index return was 126.19 per cent seems difficult - almost as difficult as losing money on treasuries to the tune of US$1.1 billion. In line with Hong Kong's rich tradition of renaming underachieving companies, MKI will be re-christened. If Hindsight had a say in the matter, then MKI would come back as Lazarus Corp. Oriental Daily News (ODN) and Ming Pao Enterprise both decided they could do without a bunch of freeloading journalists infesting their annual meetings, pinching the dim sums and misspelling executives' names. ODN's meeting was held at its Kowloon Bay headquarters, while Ming Pao barred the media from its AGM also. Ming Pao attracted the attention of other newspapers after auditors to the group questioned the recoverability of loans made to mainland parties. Shareholders are apparently annoyed, justifiably, that the company did not tell them that it planned to enter the rather risky money-lending business. They knew nothing of the 'independent third party company' on the mainland to which Ming Pao lent $185.7 million. Nor were they told about the 'prominent and well-established businessman' to which the company extended a $19.3 million loan. Nor were they told the identity of the Japanese newsprint supplier with which the company deposited $77.3 million. For the record, directors of Ming Pao awarded themselves a pay rise, according to the company's latest annual report. There are eight directors in the nil to $1 million band, up from five in 1994, and one in the $2,000,001 to $2.5 million band, up from none last year. Oh well, you know the saying: 'if you pay peanuts, you get monkeys'.
