THE ICAC's handling of intelligence is under scrutiny after the revelation Alex Tsui Ka-kit briefed colleagues using information supplied by one of their suspects. Legislators yesterday saw documents showing Mr Tsui had opened an informants' file on his old friend Henfrey Tin. Mr Tsui had previously denied doing this, an assertion he maintained yesterday. Instead, he told legislators the document was not a formal ''informants' file'' because Mr Tin was never paid for information and was ''a source only''. Under questioning, Mr Tsui admitted using information supplied by Mr Tin - called ''Source Florence'' - in a memo on cigarette smuggling. But he denied knowing Mr Tin was under investigation. Mr Tsui told legislators: ''It's simply naive to think it [the memo] would have diverted the investigation.'' The file was produced, containing a hand-written note from then operations director Graham Stockwell telling him to open an ''informant'' file ''for his own protection''. Four years earlier Mr Tsui had told the commission he severed all links with Mr Tin. Legislators had called for the file during earlier hearings after Emily Lau Wai-hing said an examination of it was vital to ''see who's lying''. The file was opened on January 22, 1990. The following day another of Mr Tsui's sources supplied the names of two companies which headed smuggling syndicates. A man named Ah Tin, later revealed as Mr Tin, was listed as an employee in one of the companies, owned by Hung Wing-wah. Mr Hung is president of the Hong Kong Boxing Association, with which Mr Tsui is closely associated. The information was passed to another section, but Mr Tsui said he never saw a report on the investigation, even though it had come from his source. Within six days Mr Tsui had gathered intelligence from Mr Tin in a ''crowded, noisy'' Chinese restaurant. He wrote a lengthy memo quoting ''Florence'' as saying Mr Hung's company was an established one linked to major manufacturers, while another company worked the black market. Mr Stockwell wrote on the memo that the other company should be examined more closely. Arrests followed, but investigations into Mr Hung's company were dropped. Several legislators asserted Mr Tsui's memo could have diverted the investigation and expressed amazement he had never screened the information from Mr Tin. Mr Tin and Mr Hung face possible ICAC cigarette smuggling charges after recent raids. Both men now sit with Mr Tsui on the executive committee of the Hong Kong Boxing Association.