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SCMP Reporter

DON Lau Yuen-leung, the suspended managing director, corporate finance, of Nikko Securities (Asia), made no attempt to use a third person's account to hide his dealings in Public International Investments Ltd (PIIL), it was claimed yesterday.

  Don Lau made the comment at the Insider Dealing Tribunal hearing into whether insider dealing in PIIL shares took place in November and December 1992.

  One of the alleged insider dealers, Don Lau bought 240,000 PIIL shares on December 8 through the account of Lau Wai-man - the husband of his sister-in-law Pamela Wong Kin-yu - the day when an announcement about a proposed takeover of PIIL appeared in the press.

  A day earlier, Don Lau was engaged in meetings on the takeover bid and the drafting of the announcement in his capacity as financial adviser to the minority shareholders.

  Counsel to the tribunal Graham Harris, QC, said there was no official record of the marriage of Lau Wai-man and Ms Wong.

  This could be the reason for Don Lau to trade in PIIL shares through Lau Wai-man's account as it would be difficult for authorities to trace any connection between the two Laus. The couple never told him their marital status, Don Lau said, and it never occurred to him that it would be difficult to trace the connection.

   'That is not a reason at all,' Don Lau said.

  '[Ms Wong's name] would not have appeared on the account opening form, had that been the reason.'   If there were any intention to hide behind Lau Wai-man, he would not have agreed to use his office as the correspondence address for the account and he would not have settled the balance of the account using his own cheques, he said.

  The tribunal heard that Don Lau usually did not give his relatives advice on trading in stocks, but did make two transactions in PIIL and EIE shares on behalf of the couple.

   Both were made on the day when there were announcements about the proposed takeover of the companies.

  After checking the announcements in the newspapers on December 8, Don Lau said he then remembered the couple as they had asked him for recommendations before and that Ms Wong was busy helping his wife with their newborn baby around that time.

  He felt there was nothing wrong in buying PIIL shares for the couple because he did not possess any inside information and that the share price of a company subject to a takeover would rise anyway.

  Although he kept in contact with David Wong of CEF capital - which was involved in both the EIE and the PIIL acquisitions, Don Lau said he did not receive any information from Mr Wong about the takeovers.

    Don Lau said he was employed by CEF Capital on two occasions and at one time Mr Wong worked under him.

  He had already heard of rumours towards November that PIIL was the target of a takeover after the acquisition of Tung Wing Steel by a consortium with major Chinese interests.

  Stressing that the identity and the background of the potential bidders of PIIL was revealed only on the afternoon of December 8, Don Lau said he would think the bidder was mainland-related.

    This was based on the market perception at the time that Chinese firms were keen to acquire a back-door listing and observe the Tung Wing takeover.

  However, Don Lau dismissed Mr Harris' suggestion that the China factor was the single most significant catalyst in the price increase for PIIL shares, despite a gloomy market as Sino-British relations soured.



No attempt to hide PIIL dealings through third party, says Lau