Abdul Rashid Hussain lost a grip on his bank, businessman Halim Saad has waited months for help and Mirzan Mahathir sold away his dreams of becoming a shipping magnate.

Then on Monday, the Loy family surrendered its sprawling finance company to the central bank.

"This crisis has hit them as they over-geared themselves. I think most of them look at their assets but forgot to look at liabilities," said a local fund manager.

Gross domestic product (GDP) shrank by 8.6 per cent in the third quarter year-on-year after contracting by 6.8 per cent in the second, pulling down some of the biggest stars in the country's corporate firmament.

Economists polled by Reuters last month yielded a consensus forecast of a 6.3 per cent year-on-year drop in GDP in 1998, the first contraction after a decade of strong growth.

Analysts said many other big names are waiting inthe wings to reschedule their debts or sell off unprofitable units.

There is speculation some of the politically well-connected businessmen may have to step down as part of deals involving government help.

"The axe is falling. The heads are getting chopped," said an economist at a large local bank, referring to talk that a number of corporate bigwigs will lose control of their firms.

"This is part of the `reformasi' that the government is taking, which is good."

He was referring to calls by supporters of sacked finance minister Anwar Ibrahim for a reform of the corporate world, which they say is dominated by government cronies.

Abdul Rashid, who controlled the third largest bank, RHBBank Bhd, said last week he had resigned as executive chairman of Rashid Hussain Bhd to become its non-executive chairman.

Financial services and property firm Rashid controls RHBBank through subsidiary RHB Capital Bhd.

Abdul Rashid's stake in Rashid was cut to 17.5 per cent from 29.5 per cent in a 3.3 billionringgit ($870 million) restructuring to pare debts.

The move brought in two new major shareholders, one of which will hold more shares in Rashid than Abdul Rashid.

On Christmas eve, government investment arm KhazanahNasional Bhd bought a 30-per cent in RHB Bank Bhd for 725.4 million ringgit from RHB Capital.

Renong, Malaysia's biggest conglomerate led by Halim Saad, has been waiting in the cold since October to get approval for its 10.5 billion ringgit debt-rescheduling plan.

Renong has close ties to the political party of prime minister Mahathir Mohamad.

But, with the government sensitive to charges of helping sweetheart companies, Renong's plan to get quick government backing to reschedule its debts was shunted to a new agency, the Corporate Debt Restructuring Committee.

Mirzan, Mahathir's eldest son and chairman of Konsortium Perkapalan Bhd, was among the first big casualties to get help from the government.

Once a rising star, Mirzan was forced to sell his shipping assets for $220 millionlast year to a unit of state oil firm Petroliam Nasional Bhd, killing his shipping plans.

The Loy family on Monday passed control of MBf Finance, among the country's largest finance companies, to Bank Negara.

Analysts said the central bank was worried the collapse of the cash-strapped unit of MBf Capital Bhd would endanger the banking system.