There were calls for Yu's resignation yesterday.

He spent most of the day avoiding the media, but called a late night press conference at the Chai Wan headquarters of the company, which publishes the Ming Pao newspaper, where he stated: 'I am not ready to pass in my resignation.' He said he thought he only had to declare convictions which had been secured in Hong Kong.

However, the head of the Stock Exchange listing division Herbert Hui insisted the rules were very clear and that the declaration covered Hong Kong and elsewhere.

The legislator representing the financial sector, Chim Pui-chung, said a media owner's record was closely related to the media's credibility and the enterprise's reputation.

People with a criminal record were not suitable to be directors or chairmen of listed companies, he said. Yu should have the courage to resign.

The Exchange's listing division is preparing a report into the affair, which will be shown to Yu for his comments before being put before the listing committee.

The listing division will be acting under the provisions of Chapter 2A of the listing rules setting out procedures for investigations, including the right of reply.

When the report has been completed, the listing committee will decide what action to take.

The report will then be passed to the Securities and Futures Commission which has wider powers to pursue, and remove, directors in certain circumstances.

Suggestions that merchant banks who advised Ming Pao shareholders on transactions carried out by the company should have discovered Yu's past and alerted shareholders were dismissed yesterday.

A spokesman for Wardley Corporate Finance, which advised an independent director of Ming Pao Enterprise during its January 1992 takeover by MPH Ltd, where Yu was a director, said: 'It is certainly not standard practice that one works on the assumptions that you have to check the criminal records of everyone who is connected in a transaction.

'If he tells you he doesn't have one, you don't immediately go around and search for it, particularly when it is in another jurisdiction. What are you going to do, conduct an Interpol search on every incoming director? If you have nothing to put you on notice, how can you know?' Shareholders' reaction was subdued.

Fidelity Investment Management Hong Kong Ltd, which holds 'significantly below one per cent' of Ming Pao's total shares, expressed its continuing confidence in the group.

'His influence of the daily running of the newspaper is not as significant as that of the management,' said the company's analyst Rex Chan.

'His impact on the company's earnings, I think, will be small.

'Our confidence lies with the financial controller, who is the person with whom we are currently in touch.' In London, David Marchant, who runs the London-based Equitable Life Far Eastern Unit Trust, holder of 695,000 shares, said Yu would have to step down.

'If he is in breach of the listing regulations then he would have to resign,' he said.

Mr Marchant said the revelations would not make any direct impact on his decision to continue maintaining a holding in the stock, but that he could envisage some people taking an ethical stance.

'Some people would sell the shares, just as a matter of principle.' Dealing in the shares of Ming Pao Enterprise Corporation and South Sea Development, which were suspended on Monday, will resume today.