Mandarin Resources Corp, a company chaired by Legislative Councillor for the Financial Services, Chim Pui-chung, is under investigation by the Securities & Futures Commission for possible fraud or misfeasance towards shareholders. It is the second attempt by authorities to probe the firm for fraud. The first was in 1989. Trading in the firm's shares has been suspended for more than nine years since the then board accused two directors of fraud relating to a property deal involving Lucky Man Properties. Both companies subsequently came under the control of Mr Chim who made a general offer for Mandarin in 1991. The company is being investigated under Section 29 of the SFC Ordinance which gives the regulator sweeping powers to investigate when persons concerned with the affairs of a company may have, in relation to its management, engaged in fraudulent acts, misfeasance or other misconduct towards shareholders. The section was used previously to probe MKI Corp and Chesterfield. The investigation has been going for more than a year and possibly since July 1994 when Section 29 was changed to allow company investigations. Mr Chim visited SFC chairman Anthony Neoh on March 15 and presented information aimed at meeting the conditions set down for resumption of trading of the shares. The SFC confirmed last night that new information had been presented but would not comment on the type of investigation underway or the source of new information. A spokesman said that 'in view of the new information, the SFC considered itself obliged to seek advice from counsel relating to Mandarin Resources under our investigation of Section 59A'. Section 59A relates to secrecy of people assisting the SFC with enquiries but is linked into Section 29A and can be used to require company officers or others to produce company books or records. Mandarin was the subject of a report by the Financial Secretary's inspectors in 1989 when the events that led to suspension of trading of shares in November 1986 were probed. The company requested its own shares be suspended because they could not get enough information to produce an accurate annual report. The stock exchange has said it would not allow trading to resume until it was given a proper valuation of the company and may insist on treating the company as a new listing. Mr Chim bought 51 per cent of Mandarin in November 1991, shortly after litigation involving Lucky Man was resolved, and launched a general offer at $1.20 a share. He ended up with 74 per cent of the shares.