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Elaine Chan

THE links between players and trading of shares in Public International Investments Ltd (PIIL) were revealed yesterday at an inquiry investigating allegations of insider trading.

  The Insider Dealing Tribunal heard a number of transactions took place before the announcement on December 15, 1992, of a conditional agreement where two companies with major mainland interests - Gower Investment and Artel - would buy PIIL.

  Gower is equally owned by China Venturetech Investment Corp and Shanghai International Securities.

  China Venturetech is a joint stock finance company authorised by the State Council in China, while Shanghai International is a joint stock finance company approved by the People's Bank of China.

  Artel is 60 per cent owned and controlled by Cheung Kong (Holdings), 30 per cent by Shenzhen Concord Enterprises and 10 per cent by CEF Holdings.

  In his opening statement, Graham Harris QC, for the tribunal, said based on the evidence available, two groups of individuals appeared to have been connected with events leading to the acquisition of 51 per cent of the controlling interest of PIIL from Teh Hong Piew.

  Mr Teh had acquired 62 per cent, or more than 227 million shares, of the company in 1982.

  The first group was the Don Lau group.

  The second group was the Leong group, comprising Leong Kwok Nyem, his wife, Amy Foong Swe Heng, and her colleague, Chan Kwan-hop.

  Mr Leong is the general manager of JCG Finance, part of the JCG group of companies, in which Mr Teh has an interest, and had worked with him in Public Bank in Malaysia before coming to Hong Kong.

  On December 2, 1992, 120,000 PIIL shares were bought in Ms Foong's name and batches of 120,000, 80,000 and 24,000 PIIL shares were bought in Ms Chan's name on December 7, 9 and 10, respectively.

  The opening statement said transactions were conducted through OCBC Securities and appeared to have been funded indirectly by Mr Leong.

  But Mr Leong denied that he dealt with the shares in December 1992 when he was in possession of relevant information and also told the tribunal that it was wrong to say that he was a close associate of Mr Teh.

  Ms Foong said her husband did not give any information to her.

  Regarding the Don Lau group, Mr Lau, managing director of Nikko Securities, was accused of making a profit by using inside information to trade in PIIL shares.

   Nikko was engaged on December 7 as an independent financial adviser to the minority shareholders of PIIL in relation to the sale of Mr Teh's shares.

  On December 8, 1992, Mr Lau bought 240,000 PIIL shares through an account of his sister-in-law, Pamela Wong Kin-yu, and her husband, Lau Wai-man, with stockbroker G K Goh Securities (HK).

  The order was placed with Wallace Yuen Moon-chung of that firm, the tribunal heard.

  But the counsel for Mr Lau, Kelly Shui, said Mr Lau not only was unaware about the purchase and sale of PIIL shares via his trading account at G K Goh, but that he also vigorously denied he had knowingly received relevant information.

  Ms Shui also told the tribunal that Ms Wong admitted she had bought and sold 20,000 PIIL shares through Mr Don Lau in 1992, but maintained that she had not received relevant information at that time.

  The tribunal also called to the witness stand, Francis Chang Chu-fai, managing director of CEF Capital, the financial adviser representing the buying parties.

  Mr Chang said the premium price of $60 million was proposed by a buyer.

  Between November 26 and December 7, 1992, PIIL's share price fluctuated from 44.5 cents to $2.475.

  When asked by Mr Harris whether Mr Teh had asked who the buyers involving mainland enterprises were, Mr Chang said he could not recall.

  The hearing continues before a three-person panel with Mr Justice Stock, Duffy Wong Chung-nam, a partner of Ho, Wong and Wong who specialises in corporate and commercial law, and Richard Ho Yan-ki from the City Polytechnic.



Link between players and deals revealed at hearing