A $1.9 billion share placement by mainland-backed China Everbright-IHD Pacific has collapsed after securities regulators said the company provided insufficient details about how the proceeds would be used, market sources say. The move is the latest development in a joint action by the stock exchange and the Securities and Futures Commission to curb unspecific corporate statements ahead of major fund raising exercises. On Monday, China Everbright-IHD placed 87 million existing shares to institutional investors and planned to issue 175 million new shares to raise about $1.9 billion. China Everbright-IHD originally told the stock exchange the proceeds would be used for general working capital. Market rumours indicated strongly the proceeds were to be used to finance the acquisition of a 20 per cent stake in the Everbright Bank of China, which is controlled by the same mainland parent. Due to the size of the proposed issue, regulators demanded more specific details about how the company planned to use the proceeds and what kind of assets it wanted to buy. Sources said company officials had so far failed to provide enough convincing information. 'You simply cannot try to raise nearly $1.9 billion by saying you would use the proceeds as general working capital while rumours are flying about the company's possible acquisition of mainland assets,' the source said. Soon after the old shares - underwritten by Morgan Stanley and Indosuez W.I. Carr - were snapped up by investors, they were notified by the underwriting agents the transaction could not be processed as Hong Kong regulators had blocked the issue of the new shares, sources said. 'It appears the fault is largely with the company which is not quite in the know about how the system works here,' one source said. Trading in three subsidiar ies of China Everbright Group - Everbright-IHD, China Everbright International and China Everbright Technology - are still suspended and are likely to remain suspended today. Sources said China Everbright-IHD was stepping up negotiations with regulators to resume trading soon.