The former chairman of Gay Giano International and his brother fashioned a scheme to manipulate the stock market and boost the clothing retailer's share price, a court heard yesterday. Cheung Sing-chi, 41, and Cheung For-sang, 49, pleaded not guilty to conspiracy to defraud shareholders between October 1999 and October 2000. Prosecutor Bernard Ryan told the District Court the pair enlisted stockbrokers to create the appearance that Gay Giano stocks were being traded after they were floated on April 13, 2000. The rise in the share price - which jumped 52.9 per cent over two days in June - made other investors join in the apparent buying frenzy. This pushed Gay Giano's share price to $4.65 on September 11, nearly four times its initial public offering price of $1.20. The retailer operates about 20 local stores under the brands Gay Giano, Cour Carre and Due G. It has five mainland outlets. Mr Ryan told the court the two defendants recruited stockbroker Raymond Wong Wing-keung, 34, as a frontman for the scheme between late 1999 and early 2000. Mr Ryan said Cheung Sing-chi faxed Wong a list of buyers willing to take part in the scheme and buy shares so he could control the market. 'As a result [on April 5, 2000] Wong Wing-keung was in control of about 40 million out of 50 million publicly offered Gay Giano shares,' Mr Ryan said. 'With such tight control over the ownership of the publicly offered shares, the market could be manipulated.' The brothers also allegedly recruited Stephen Lee Sing-wai, 36, to take part in the scheme. But their activities came to light after the recruited buyers sold their shares for profit on September 18, 2000, resulting in the shares plummeting to $0.76 from an overnight close of $4.35. At the time it was reported that 20 stockbrokers involved in margin trading suffered losses totalling $39.3 million. Cheung Sing-chi was arrested last July and resigned a week later. Wong and Lee pleaded guilty to market manipulation and were sentenced to 240 hours of community service and a suspended nine-month jail sentence respectively. The trial continues before Deputy Judge Bernadette Woo.