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Amy Chew

SUCCESS Holdings (SHL) director Tony Lau Hon-chung said that he was not fully aware of the extent of his girlfriend's dealing in the shares of his company, an insider dealing tribunal heard yesterday.

  Mr Lau also testified that he was displeased that his girlfriend, Chan Dan-nar, asked him for money to fund her purchase of shares in his company on May 20, 1992.

  Testifying at the inquiry, Mr Lau said: ''On that day, I was not in a good mood, yet she wanted money from me.

  ''Ms Chan told me that she had no money to foot the bill,'' he said.

  Mr Lau said he thought that Ms Chan had the necessary money to fund the purchase because she had sold a flat and had some money in her bank account.

  ''She told me that she had not used the proceeds from her flat to pay for the shares as she had used the money to buy bonds and other things,'' he said.

  Mr Lau said he was angry about that, adding: ''I was not willing to give her money on that day.

  ''I was not happy that she did not want to use her [own] money to fund her purchase and, instead, asked me for money.

  ''I then told her: 'In that case, you might as well sell the shares to foot the bill'.''   On the following day, May 21, Ms Chan sold 244,000 SHL shares at prices ranging between $1.38 and $1.40 per share.

  Those shares represented 93.13 per cent of the day's total trading in SHL on the Hong Kong Stock Exchange.

  On May 22, Ms Chan sold a further 194,000 SHL shares at prices ranging between $1.42 and $1.45 per share, representing 77.6 per cent of the day's total trading in SHL shares on the stock exchange.

  The effect of the sale of her shares on May 22 was to reduce the closing price of SHL shares to $1.46 per share.

  On the same evening, SHL publicly announced a proposal to privatise the company at $1.60 a share, a premium of 9.6 per cent over the closing price.

  Mr Lau said that he was not aware that the sale of Ms Chan's shares had had such an influence on the stock exchange.

  ''I only came to know of that after I received a report from the stock exchange.

  ''I do not follow the price of SHL shares closely,'' he said.

  Mr Lau said the reduction of the share price was ''meaningless'' in relation to the privatisation bid.

  ''Such a reduction would only be meaningful after the privatisation succeeded and the street shareholders tendered their applications.

  ''At that time, it was far away from the privatisation,'' he said.

  On whether he knew the share price had risen on May 19 [the day Ms Chan bought the shares], he said: ''Yes.''   Mr Lau said that he became aware that the SHL share price had risen when Ms Chan asked him for the money on May 20.

  ''At that time [May 20], I suspected someone had disclosed the privatisation news to street shareholders.

  Mr Lau said that he learnt that Ms Chan had bought SHL shares at the time she asked him for money.

  Mr Lau is alleged to have knowingly disclosed vital corporate information to Ms Chan to enable her to deal with her shares in SHL.

  The key corporate events allegedly made privy to Ms Chan were Mr Lau's plans to privatise the company, the payment of a special dividend and the proposed takeover of the company by Chevy Investments.

  Mr Lau said Ms Chan had unexpectedly asked him about his plans to privatise the company. This, he said, took him by surprise.

  Mr Lau said that he told Ms Chan that the privatisation plan might not succeed.

  He said he told Ms Chan that he had certain reservations about the privatisation.

  ''But the truth was, I did not have any reservations. She kept on asking me why the privatisation would not succeed and I just had to give her some reason,'' he said.

  Mr Lau again told Ms Chan that she should sell her shares as he was angry with her.

  ''That's all. It's very simple,'' said Mr Lau.

  Mr Lau said that if he had told Ms Chan about the $1.60 per share he was offering for the privatisation, she might have bought more shares.

  ''She did not have that much guts and therefore did not buy more shares,'' he said.

  Before Mr Lau testified, Ms Chan told the tribunal Mr Lau had told her about the three key corporate events in the company and said that she dealt with the shares accordingly.

    She said she considered the profits that she made to be her own.



Success director was 'not fully aware' about extent of girlfriend's dealing