DESPITE allegations that Pam and Frank International's financial records had been tampered with Standard Chartered Securities still recommends investors buy the stock on weakness. It is claimed that a former employee of Pam and Frank blackmailed the company by threatening to tell bankers about instances of corporate deception. If the allegations turn out to be true, the company's financing arrangements to buy Jordache Centre in Kowloon could be jeopardised. The company has admitted that records dated September 1 and the interim results announced in January may have been tampered with. But it says it does not know whether the contents of the published financial results could have been affected. Lawyers and accountants have been appointed to study the case. Standard Chartered Securities research manager Mr Stanley Ng said he had asked the company about the matter and was confident it would not have a serious effect. Mr Ng recommends buying the stock on the basis of the potential growth of Pam and Frank in the next two years. The company started out making sports bags, but has since widened its product range to include luggage, household plastic items, toys, car covers and other car accessories. It also trades in plastic goods, household items and raw materials related to its product lines, as well as porcelain and chinaware products. Its Original Equipment Manufacturer (OEM) customers include international brand names such as Dunlop, Puma, Reebok and Wilson. The company's operations can be divided into three major divisions: the manufacture and sale of cut-and-sew products; the manufacture and sale of household goods and plastic items; and the trading of plastic items, household goods and raw materials related to its product lines. At present, Pam and Frank has more than 115 OEM and private-label customers for its cut-and-sew products, including United States chain stores and retailers such as Kmart, Walmart and Avon. Last year, Kmart was the largest single customer, accounting for43 per cent of total cut-and-sew production. Pam and Frank management say Walmart will place more orders in the coming years and should become the second largest customer for cut-and-sew products, with 15 to 18 per cent. In March, Pam and Frank signed an agreement with Time Warner Sports Merchandise to make and distribute sports products and collectible items in China under the World Cup '94 label. The company is expected to show impressive growth up to 1995 through its expanding distribution network in China and the US. Standard Chartered forecasts a 44 per cent profit growth to $70.6 million in 1994, and a 35 per cent growth to $95.7 million in 1995.