Shares in CP Pokphand Co, the Hong Kong listed arm of Thai multinational and leading mainland investor Charoen Pokphand Group, fell sharply yesterday as investor concern escalated about the firm's cash-flow problems. The fall came as Disclosure Inc, a share-transaction tracking firm, revealed that chairman Dhanin Chearavanont cut his stake in the company earlier this month. Pokphand shares yesterday slumped 25 per cent to 69 cents, taking their loss since Tuesday's close to 40 per cent. Shares in a Thai-listed associate, Charoen Pokphand Feedmill, also fell yesterday. Trading volume in Pokphand soared to 22.7 million shares, compared with the daily average this year of 1.26 million. The company, whose interests include agri-business, real estate and motorcycle manufacturing, has asked holders of some of its convertible bonds not to exercise a redemption clause due on Thursday because it was facing a cash crunch. Directors said the holders of US$92.8 million of floating rate notes due in April 2000 had asked the firm to redeem the paper. The demands forced the firm, which had mainland revenue of US$1.5 billion last year, to call a meeting on May 29 in a bid to reverse the cash-call requests. It has been talking to bankers about its debt since April 2. 'If holders of the 2000 notes do not agree to the company's proposal, then the event of a default will arise,' the company said. Analysts said the company, which also has floating-rate notes due in 1999 and 2001, had estimated foreign currency liabilities of between US$1 billion and $1.5 billion. Mr Chearavanont, once Thailand's richest man, has often been cited as one of the mainland's savviest foreign investors with solid connections to the business elite. Since the onset of the Asian financial crisis, which has sharply eroded the value of the Thai baht, Pokphand has been scaling back some of its mainland commitments. Company officials in Hong Kong and Bangkok could not be reached yesterday for comment on the company's financial standing. One employee said not one of the firm's directors was in Hong Kong. One analyst said: 'There are strong rumours that they could go bust . . . parts of the private business may be allowed to fail.' Last month, the Bangkok-based group asked bankers to reschedule US$40 million in loans owed by a joint venture. 'There are more than 100 businesses, with lots of cross-holdings. It is not an easy company to follow,' the analyst said. In Bangkok, shares in Charoen Pokphand Feedmill dropped 13.83 per cent yesterday to 34.25 baht. Pokphand is a major shareholder in Feedmill. The firm's American depositary receipts also fell sharply in New York on Thursday.