Ming Pao Enterprise Corp is taking legal action against CIM Co, a private company of former Ming Pao chairman Yu Pun-hoi, to recover a questionable loan to a mainland company. Ming Pao said it would make provisions for the principal amount of $185.7 million of the loan, which would be reflected in the interim results to September 30. The arrangement followed the failure of CIM to indemnify Ming Pao against the non-recovery of the loan as stated in a July announcement. Ming Pao managing director Paul Hui Hau-tung said: 'The company has undergone various negotiations with CIM regarding the giving of acceptable securities by CIM to the company, but as at the date of this announcement, no securities acceptable to the company have been offered by CIM.' While the company said the provision would have no material impact on its financial position, it was widely believed it would aggravate the difficulties faced by Ming Pao. Ming Pao recorded a loss of $9.39 million in the year to March 31. The loan is one of the four questionable unsecured loans made by Mr Yu. Mr Hui said earlier the principals of other loans had been recovered despite arguments over interest.