The chairman and two directors of listed printing machinery company Dah Bang (Holdings) breached a range of market regulations during and after its $56.5 million flotation in 1994, a stock exchange investigation has revealed. The investigation found members of the company's controlling Chen family created a false market in its shares, acted in concert with certain third parties and failed to ensure there was an open market in its shares following its flotation. The stock exchange yesterday publicly censured chairman Chen Da-yun, his wife Chen Chung Man-shun and son Paul Chen Chung-ho, for the breaches. The investigation concluded the Chen family had acted in concert with certain unnamed 'controlled persons' so that 'certain shares ostensibly in public hands were, in fact, held by the controlled persons'. The investigation also revealed the family 'caused or failed to take steps to avoid the creation of a false market in the company's shares following its flotation'. The Chen family owned a 70.5 per cent stake in the company after the share offering. 'It failed to ensure an open market in Dah Bang's shares following its flotation,' the exchange said. 'It breached rules by financing directly or indirectly the acquisition of the shares by certain persons.' The Chen family was also accused of creating a false market after the flotation. 'It failed to avoid the false market as it offered shareholders, the public and the stock exchange no information which would materially affect Dah Bang's share price,' the exchange said. The company plunged below its $1.13 listing price to 82.5 cents on its debut on July 15, 1994. But within a fortnight, it rose sharply by 20 per cent to 99 cents on August 1. Dah Bang recently attracted a takeover bid of 90 cents a share and 12.5 cents a warrant by mainland-backed steel trading company Golik Investments, partly owned by China Iron and Steel Industry and Trade Group Corp. TAKEN TO TASK Failure to ensure open market in firm's shares Rules breached by financing share purchases by third parties Failure to reveal price-sensitive information
