Lawsuit threat weighs down Fittec debut

With the threat of a lawsuit hanging over the company, Fittec International Group closed 2.17 per cent below its offer price at $2.25 on its trading debut yesterday to become the only new listing to fail to post a first-day gain in the past month.

Fittec rose 4.3 per cent above its offer price of $2.30 as trading began but soon ran out of steam as $295 million worth of shares changed hands.

Brokers said selling pressure mainly came from retail investors keen to get their money back after news that a former director, Hideki Okauchi, had filed a writ claiming he was entitled to a 10 per cent stake in Fittec.

Chairman Philip Lam tried to ease investor concerns yesterday saying the company had sought legal advice, adding that Mr Okauchi's claims would 'not have any impact on our business and we are confident that it can be solved'.

Mr Lam confirmed Mr Okauchi had been a director of wholly owned subsidiary Fittec Hong Kong from 2000 to 2003 but said he did not have any stake in the firm.

According to Fittec's supplemental prospectus, Mr Okauchi claims he was invited by Fittec Hong Kong director Sun Ming-yee to become a director and shareholder on the understanding that he would receive a 10 per cent stake in Fittec International.