Depositors fear bank will sink

Depositors fear bank will sink

KUALA LUMPUR (AP): Hundreds of people lined up at branches of one of Malaysia's largest savings banks for the second day yesterday, heeding rumors that its president was ill and the company was about to go under.

Bank Negara, Malaysia's central bank, issued a statement saying Malaysia Borneo Finance Ltd., which has two million customers and a solid record of 28 years, was sound and would meet any depositor demands.

The run on one of Malaysia's major finance companies, which has 151 branch offices nationwide, began Wednesday afternoon after rumors in the stock market spread that MBf's chief executive and president, Loy Hean Heong, was seriously ill and the company would sink.

Loy, who has been ill for some time and is hospitalized in Paris, issued a signed statement saying the rumors were attempts by manipulators to undermine confidence in Malaysia's financial system and share prices of the group's listed companies.