The consultation was triggered by a series of revelations pointing to directors having criminal records but failing to disclose them in their declaration.

Directors of companies listed after November 1993 must make a declaration under oath on their past.

However, it has been found that the form of the declaration, even made under oath, does not constitute a statutory declaration.

Therefore, anyone who lies under oath in such a declaration will not be subject to prosecution.

'We are considering using subsidiary legislation to give statutory backing to this provision,' Mr Neoh said.

The proposal forms part of a larger study to enshrine legal backing in the listing rules.

Summing up his work in the past year, Mr Neoh said yesterday the SFC had tightened enforcement of rules and compliance with the code of best practice.

That was reflected in the increasing number of censures and prosecutions of rule-breakers.

The most prominent case was the investigation into MKI Corp and Chesterfield.

But he said that in future the SFC would resort to investigating suspected companies under the Securities Ordinance section 29(A).

Such an investigation, using existing resources of the SFC and conducted on a smaller scale, was more flexible and less costly than acting under the Companies Ordinance section 146, he said.

Investigations into the World Trade Centre Group and Tomson Pacific as well as the affairs of the Allied Group were all carried out under section 146.

Admitting that both investigations had consumed great financial resources, Mr Neoh said there would be some further developments in these two cases soon.

He refused to comment on whether prosecutions would be started.

'Quarterly meetings with the Commercial Crime Bureau are held to avoid duplication of work,' he said.

Section 146 gives the Financial Secretary the power to appoint an inspector to conduct investigations into suspected malpractices.