STRONG indications are emerging that the Tianjin Bohai Chemical Industry Co H-share offer was pushed past the finishing post with the help of co-underwriters. Highly-placed sources close to the underwriters confirm that mainland authorities sought help to get the issue away and without some underwriters stepping in the offer would have been undersubscribed. In this investment climate, it is not a complete surprise that an H share might feel the cold shoulder of an investor. Merchant bankers were admitting as much earlier this week. The time had come, they said, for a reassessment of China's overseas listings. From now on, people are going to be more selective about what they buy and the price they are willing to pay, and no company knows that better than Tianjin Bohai. But although the chemical group may be chastened by its experience at the hands of investors, those very investors have a right to know exactly what happened. The golden rule of stock markets is that all information must be disseminated evenly and without prejudice. It creates a level playing field for all investors. If a company withholds information which could materially affect the price of its shares, and is not breaching listing requirements by doing so, it would appear the playing field has been altered significantly. A handful of people are well aware of the exact situation at Tianjin concerning the subscription for shares, and that information should be made public. The Stock Exchange of Hong Kong should take steps to ensure the markets and the companies which list on them remain transparent, particularly mainland-backed companies where information is often more scarce than with Hong Kong-based companies. If companies are pressing sub-underwriters to pick up a shortfall, the true level of subscriptions should be made known to the investing public. Shanghai Petrochemical's co-sponsors and underwriters Merrill Lynch and Peregrine announced last year they had subscribed to the new issue, which was narrowly over-subscribed. Some said at the time the declaration was done only because Shanghai Petrochemical was going for an American Depositary Receipts (ADR) listing. That remains a matter of pure speculation. What is important is that the underwriters in the Shanghai Petrochem issue declared their interests. We urge the Stock Exchange of Hong Kong to make sure all other companies follow suit. Rule change needed THE Monetary Authority's working party on financial disclosure has stepped back from asking the banks to open their books to the public. It says it will now review the issue in mid-1995, although it is pressing forward with its recommendation for ''substantially'' greater disclosure from the banks this year. This latter step should be welcomed, as should any move to increase the banks' disclosures. But it still means the banks will not have to declare the size of their inner reserves - pools of funds which can be used from year to year to smooth out profit figures - and the public will still not be fully informed on the financial position of their banks. While this rule remains in place, the territory's banking system will never truly be above reproach.
