The two merchant banks involved in the listing of Kwong On Bank yesterday firmly denied any preferential treatment in the allocation of shares in the placement process. Both SBC Warburg and Schroders Securities, as joint book-runners to the listing, said they were not aware of any names of urban councillors or companies controlled by them on their list of those to be allocated shares. An SBC Warburg spokesman said the placement of shares to professional investors was based on methodology worked out with Schroders. He said Kwong On Bank exerted no influence in the process. All placees were graded on a uniform basis, depending on the quality of the applicant. Within the same grade, every applicant was given the same percentage of shares against that requested. 'From what we can see, we do not see how the issue of preferential treatment could have arisen,' the spokesman said. Controversy flared on Monday as Kwong On Bank shares started trading amid a report which alleged preferential treatment to certain urban councillors. Bank chairman Ronald Leung Ding-bong, also chairman of the Urban Council, was reported to have assisted his peers in procuring the bank's shares, a claim he subsequently denied. The bank offered 75 million new shares, initially with 20 per cent on public offer and 80 per cent for placement with professional investors. The public offer was over-subscribed by 23 times and the placement about 19 times. The Securities and Futures Commission said it would look into Kwong On Bank's share offer mechanism to see if the process had been fair. Ma Lik , chairman of the disciplinary committee of the pro-China Democratic Alliance for the Betterment of Hong Kong (DAB), said two of the DAB's seven representatives in the Urban Council - Suen Kai-cheong and Christopher Chung Shu-kun - had each put in $50,000 and sought to buy the shares of the bank through another councillor, Christina Ting Yuk-chee. He said the two councillors had bought the shares as a way 'to show their support of the chairman [of the Urban Council]' and as a form of investment. He said he was satisfied that no conflict of interest was involved. Among the 12 Democrats on the council, at least two applied to purchase shares, and they were expected to make an explanation at the party's central standing committee meeting tomorrow. Democratic Party economic policy spokesman Huang Chen-ya said: 'On the face of it, I do not find any conflict of interest.'