ITE (Holdings) sold new shares equivalent to an 11 per cent stake to strategic shareholders at a 68 per cent discount to the company's initial public offering (IPO) price about four months before the listing. According to the Growth Enterprise Market (GEM) candidate's listing prospectus, Fullworth Asia, Sanbar Development, Hans-Georg-Theodor Pruemm and Holger Hubert Roessner bought 16.4 million, 16.4 million, 3.58 million and 12.56 million shares respectively last November. British Virgin Island-incorporated Fullworth Asia and Panama-incorporated Sanbar Development are both engaged in direct investment in high growth sectors. Mr Pruemm and Mr Roessner have also been granted share options which give them the right to each subscribe to 1.2 million shares at 19 HK cents each, or 74.7 per cent lower than the 75 HK cents IPO price, within the next 10 years. Mr Pruemm is a founder of Germany-listed smart card components broker ACG - a supplier to ITE, while Mr Roessner is managing director of subsidiary ACG (Asia Pacific). All four strategic investors would be subject to a share disposal moratorium of six months, and were not connected to ITE and its directors, the prospectus said. ITE provides integration solutions mainly to property developers and universities on their implementation of smart-card technology, whose applications include people-access control, personal identification and payment for products and services. Chief executive Vincent Lau said the ACG executives had extensive industry experience and had been advising ITE on its business development since 1998, although they had no management role. He did not say what the investors would do to help ITE's development. ITE is to sell 45 million new shares to institutional investors, equivalent to 10 per cent of the firm's enlarged capital. The firm fulfilled the regulatory requirement that at least 20 per cent of its shares be held by public investors - parties not connected to the company and its directors. However, due to the strategic investors' share sale moratorium, in the first six months of the company's shares trading, only 10 per cent will be available for trading in the market. Although the IPO's final price of 75 HK cents is close to the low-end of the indicative range of 73 HK cents to 93 HK cents, Mr Lau said it was not a reflection of a lack of confidence in the company's valuation. 'The lower-end pricing was due to our consideration of the changed investment sentiment toward TMT [technology, media and telecommunications] shares,' he said. 'The price-earnings ratio of the share sale still exceeded 20 times, so it was not a bad valuation.' The shares will begin trading tomorrow.