The saga of APP's demise will prove difficult to unravel, particularly as it has been more than nine months since the company announced a self-imposed standstill on repayments on US$12bn debt.

"The horse has bolted and it's taken the stable door with it," says Alan Greene, analyst with Barclays Capital in Singapore.

Most of APP's operating assets are in China and Indonesia while its headquarters are in Singapore. Many of the world's leading investment banks and accountancy firms have done business with the group, while several prominent Singaporeans have served on the boards of APP and other related Sinar Mas Group units.

Once hailed as one of the few remaining large Indonesian conglomerates to have survived the Asian financial crisis of 1997-98, APP's problems stemmed from 1996 and 1997, when it invested billions on new plant in Indonesia and China.

Following the crisis, the company continued to expand, drifting into over-capacity and becoming dependent on debt markets.

Warning bells began ringing in 1999, when the Sinar Mas Group's Jakarta-based bank, Bank Internasional Indonesia, was effectively taken over by the government for losses incurred during the financial crisis and lending to related parties.

Yet as late as last year, APP was still able to call on foreign investors for more funds. With aid from Morgan Stanley, Credit Suisse First Boston and JP Morgan, the company raised nearly US$1bn between March and August 2000.

This year, the tap was abruptly turned off. APP was sued by several creditors in Singapore's courts for repayment of overdue debts.

This was followed by class action lawsuits in the US against APP and its former auditor Andersen, and Merrill Lynch, the underwriter of its 1999 equity offering.

The lawsuits alleged the company had mis-stated its finances by not revealing two derivatives contracts until they had caused it US$220m in losses.

Last month, Andersen resigned as auditor to the company without giving a reason. In September, Deloitte Touche Tohmatsu, which was assigned in May to investigate the two swap contracts, also resigned without explanation.

For Singapore, the APP saga has been an embarrassment as the country prides itself as a paragon of corporate transparency.

Prominent Singaporeans have also worked for Sinar Mas companies. In 1999, APP appointed Koh Beng Seng and Elizabeth Sam, former senior officials of the Singapore's de facto central bank, the Monetary Authority of Singapore, as senior advisers. They later resigned.

Singapore-listed Sinar Mas companies Asia Food & Properties and Golden Agri Resources also had two members of the ruling People's Action Party as independent directors - K. Shanmugam, who has since resigned, and Lew Syn Pau.

Some analysts speculate that Singaporean authorities had hung back from launching a major investigation for fear of affronting Indonesia.

With the group's controlling shareholders, the Widjaja family, and most of its assets located across the Malacca Straits, Singapore would have little chance of liquidating the company and would risk hurting relations with its neighbour.

However, the city state may have been shocked into action by the US lawsuits, which, if conclusive, could undermine its reputation.