BACK-DOOR listings in Hongkong may be forced to go through stock exchange new-listing approval procedures under a package of directives issued yesterday by local regulators. A joint statement by the stock exchange and the Securities and Futures Commission (SFC) yesterday warned companies involved in back-door listings that in future their activities would be subject to greater scrutiny. What will be subject to specific attention will be listings involving the acquisition of a stake in a target company below 35 per cent. In such cases, should the acquisitor attempt to inject new assets into the listing the stock exchange is threatening to invoke the new-listing rules when considering any such transaction. Stock exchange head of listing Herbert Hui stressed that the action of the exchange and the SFC was not a clampdown. ''What we are trying to do is to ensure that those involved in these types of transactions operate within the rules,'' he said. A back-door listing occurs when an unlisted company buys control of a listed company and then injects assets from the acquiring company into the listed vehicle. ''In this way, the acquiring company can in effect become listed, without going through the same vetting process prescribed for new listing on the exchange,'' said the regulatory statement. SFC deputy chairman Ermanno Pascutto said: ''Both the exchange and the SFC closely scrutinise all details of back-door listings to ensure that the interests of minority shareholders are fully protected.'' The statement issued by the regulators is a response to growing market concern at the proliferation of this activity. Mr Pascutto said the aim of the regulators was to ensure that the interests of minority shareholders in the affected listed companies were protected. Where back-door listings occur the regulators will be demanding that the buyer offer all shareholders affected by the transaction a categorical explanation detailing what the buyer intends to do with the listing. Mr Hui said: ''We want them to disclose what their present and future plans are for the company, whether or not there will be a material change in the operational business of the company and what assets, if any, they expect to inject into the listing.'' The SFC will insist that the financial advisers to the minority shareholders undertake their responsibilities with a view to informing investors whether or not the material benefit offered them in the deal is the same as that offered to the significant stakeholder being bought out of the company. ''If it [the SFC] determines that the controlling shareholder has received any undisclosed benefit not available to all shareholders, the SFC will not hesitate to take the strongest action open to it under the Takeovers Code,'' said Mr Pascutto.