INVESTORS yesterday flooded the market with Allied Group shares and warrants after the Stock Exchange turned down the company's request to suspend trading. Shares in Allied Group were the most heavily traded stock on the market, with its $397.47 million accounting for 14.55 per cent of the day's total turnover. The share price plunged 8.1 per cent to $1.02. Investors were informed - through a statement issued by regulatory authority the Securities and Futures Commission - of the raid by a 300-strong Commercial Crime Bureau team shortly before the market opened. The watchdog body put out a three-paragraph statement explaining details of the swoop and saying it was likely to be a protracted investigation. Three of the 100 companies involved also put out their own statements - Paragon Holdings, Capital Asia and Santai. Head of the exchange's listing division Herbert Hui Ho-ming said: ''Our understanding is that this information, that Allied is the subject of investigation, has been the subject of quite a few announcements already. ''If you are an investor in Allied, the first thing you would take into account is that this group is in the process of investigation. ''So we took the decision, with the SFC, it is not one of those cases where the market is uninformed, and there are no charges being pressed, and decided not to suspend trading.'' He said to suspend trading would have been to further close the market unnecessarily. In a joint statement, Allied Group, Allied Industries and Allied Properties advised shareholders and warrant-holders to exercise extreme caution in dealing with the companies' securities. The share price of Allied Group went down 90 cents yesterday to finish at $1.02. Its 1993 warrants fell 45 cents or 15.8 per cent to close at 24 cents. The share price had been rising since the weekend on strong rumours of a takeover, reportedly by tycoon Li Ka-shing. Rumours that the Cheung Kong (Holdings) chairman, and mainland steel giant Shougang Corp, were likely buyers, fuelled the share price on Tuesday, triggering a 15.6 per cent jump. Mr Li was in unusually tight-lipped form at a cocktail reception yesterday, stonewalling questions on Allied with a terse: ''I won't say a word [on the issue].'' Philip Chan, head of research at PBI Securities - part of Lee Ming Tee's empire when known as Sunshine Securities - said the active trade was prompted by rumours of new shareholders in the firm. ''. . . uncertainty surrounding the stock . . . the change and who will ultimately take control of the company,'' Mr Chan said. He said the investigation did little to affect the share price because the company had sent out warnings to investors. ''It's up to investors to decide whether or not to invest,'' he said. PW Asia Brokerage director Andrew To said Allied Group closed at the day's high of $1.18 in the morning session on expectation there would be announcement about possible takeovers. He said there were strong buying orders near the morning close, despite the televised regulatory swoop, but the absence of takeover news emerged in the afternoon driving investors away. The other two Allied groups of companies, Allied Industries International and Allied Properties (Hong Kong), also saw share prices fall yesterday. Allied Industries was off 10 cents, or 11 per cent, to 81 cents, while Allied Properties (Hong Kong) dropped 15 cents, or 9.7 per cent, to $1.40.