A COMPANY director who enlisted his daughters in a scheme to bypass stock market listing rules has been publicly censured by the Hong Kong stock exchange. Continuing its crack-down on rule-breakers, the exchange has castigated Tse Kwok-wah, the chairman of building group Shun Shing Holdings, for failing to comply with its regulations at the time of the company's flotation in February 1992. The exchange's action follows an investigation into the conduct of Mr Tse - also known as Tse Yip-sang - which concluded that he was in breach of regulations that a public company must have at least 25 per cent of its shares in public hands. The exchange charges that, while it appeared that the necessary amount of stock was being floated off, Mr Tse had advanced funds to two of his daughters in connection with the subscription to the offer. The deal meant that while shares were ostensibly in the hands of the public, Mr Tse could exercise control over them. ''Accordingly, Mr Tse is hereby publicly censured by the listing committee for either advertently or inadvertently acting in breach of his directors' undertaking in that he failed to take steps to avoid breaches of Rule 8.08 of the exchange listing rules by failing to ensure an open market in Shun Shing's shares,'' said a statement issued by the exchange last night. ''Further, Mr Tse failed to take steps to avoid breaches of Paragraph Two of the listing agreement by failing to take steps to avoid the creation of a false market in Shun Shing's shares following its flotation by failing to release information which might have been expected materially to affect market activity in, and the price of such shares.'' The exchange emphasised that its action was being taken solely against Mr Tse, and not against Shun Shing or any of its other board members. It said Mr Tse had undertaken to ensure future strict compliance with his director's undertaking, the exchange listing rules and the listing agreement. Mr Tse is now making arrangements to ensure that 25 per cent of Shun Shing's stock is in public hands by reducing the number of shares he controls. The latest shareholders register shows that 75 per cent of Shun Shing shares are held by Golden Success, a company 60 per cent controlled by Mr Tse. The public censure is the latest in a series issued by the stock exchange since it warned the market last year that it was going to take a hard line on those who broke its rules. In February Lee Lap of Termbray was censured in similar circumstances, and in May last year Hanwah Holdings chairman Yiu Kin-wai and managing director Tony Yuen were similarly criticised for failing to take steps to ensure an open market in their company's shares. Last night, exchange head of listing Herbert Hui issued a stern warning that a close watch was being kept on listings, and those who broke the rules could expect to pay the price. ''These cases should indicate to the market that we are very serious in trying to stamp out this problem,'' he said. ''The public float requirement for a 25 per cent true float must be strictly adhered to and is considered to be a corner-stone of the requirements for listing on the Hong Kong stock exchange.'' Peregrine Brokerage has already been disciplined by the stock exchange under the Securities Ordinance for activities linked to the flotation of all three companies. In September, the Securities and Futures Commission (SFC) concluded that a substantial portion of the public float of Hanwah, Termbray and Shun Shing was, either at the time of listing or shortly afterwards, restricted to the extent that there was no open market in the companies' shares. At the time, Peregrine made an ex-gratia payment to the stock exchange compensation fund, and announced that the director involved had left the company and that new supervisory staff had been recruited to prevent a repetition. Yesterday's exchange statement came a day after Financial Services Secretary Michael Cartland revealed that the exchange and the SFC were planning further measures to deal with the problems of share over-subscription.