Travelsky Technology's share offering was over-subscribed despite controversy over the company's decision to pay a special dividend to its existing shareholders for contribution to a Beijing-run social-security fund. The 250.55 million H shares offered to international institutional investors and 19.76 million shares to Hong Kong retail investors had been over-subscribed eight times and seven times respectively, a source said. The shares' final price has been set at HK$4.10, close to the high-end of the indicative price range of HK$3.50 to HK$4.25. Salomon Smith Barney head of China research Charles Cheung said investors seemed to have discounted impact of the special dividend on the company's cash position and bought the shares on its strong market position and track record. Travelsky, China's dominant electronic airline ticketing services provider, has an agreement with its 20 airline shareholders under which the latter are not allowed to compete with it in the electronic ticket reservation business. They have also agreed to procure ticketing services exclusively from Travelsky for five years. The company has declared a special dividend equivalent to 10 per cent of its listing proceeds for its shareholders' contribution to the social security fund. Reuters news agency yesterday quoted a Ministry of Finance official as saying the practice was not in line with the requirement. When state-owned companies went public overseas, the existing shareholders were required to sell down their holdings by an amount equivalent to 10 per cent of the listing proceeds and contribute it toward the fund, the official was quoted as saying. Travelsky's existing shareholders did not dispose of their shares in the listing process. Listing sponsor Goldman Sachs (Asia) would not comment on why Travelsky's decision deviated from the requirement. Analysts speculated some of the company's shareholders - Travelsky's parent Civil Aviation Computer Information Centre (Cacic) and the 20 mainland airlines - were reluctant to reduce their holdings. Cacic will hold 23.4 per cent and the 20 airlines will have a combined 44.7 per cent in the company after its market flotation.