Error forced freezing of WTC shares
THE Government has had to ''de-freeze'' a parcel of World Trade Centre Group (WTC) shares just one week after ordering the halt on trading, following the discovery of an error by a nominee company.
The nominee company has said it was at fault because it had supplied the government-appointed inspector with an incorrect list of share certificate numbers, according to a government statement.
The mistake in quoting certain share certificate numbers had rendered void part of the share freeze, the Government said yesterday.
A spokesman said: ''The effect was that 44.85 million World Trade Centre Group shares not intended to be the target of the investigation were included in the restriction order dated July 8.
''In other words, the imposition of restrictions on these shares had no legal effect.'' A statement explaining the mistake will appear in three English and Chinese-language newspapers today.
The parcel of shares to be liquidated represents around a quarter of the 179 million shares that were frozen under the Securities (Disclosure of Interests) Ordinance last week.
If the owners do not lay claim to their shares within six months they will be sold and the income channelled into Government coffers.
The move is separate from, but prompted by, the $15 million probe launched last August, and came out of an investigation mounted last month.
The Government yesterday said the case of mistaken identity had only been uncovered after last week's publication of the share certificate numbers which were the subject of the order.
One of the nominee companies involved in the investigation discovered the error and told the inspector that it had inadvertently provided him with an incorrect list of share certificate numbers.
According to the Government, the inspector's report was compiled on the basis of information received from the nominee company, so the restriction order automatically contained the same wrong information.
The Financial Secretary put out a notice saying the 44.85 million share tranche no longer fell within the restrictive order.
The Government spokesman added: ''This, however, does not affect the imposition of restrictions on the other World Trade Centre Group shares covered by that order.
''The Financial Secretary at the same time made a new order to subject the correct 44.85 million WTC shares to the restrictions of Part Five of the Securities (Disclosure of Interests) Ordinance as it appears that there are difficulties in finding out the relevant facts about these shares.'' Part Five restrictions broadly limit the transferability of shares.
Shares under the regulatory spotlight were placed out in three parcels in July 1990 through HSBC Holdings and Liu Chong Hing nominee firms.
The named parties are Pierson (Asia), Commercial Success and On Shine Investments.
Spearheading the hunt was John Lees, of Ferrier Hodgeson Marfan, who was appointed under Section 33 of the securities disclosure ordinance.
The limit on transferabilty is the same ruling that was used to ascertain ownership of Hongkew shares and, just four weeks ago, to look into a two-year old share deal in Asia Securities International (ASIL).