WIDESPREAD rumours of back-door listing by mainland enterprises could have prompted bulk purchases of Public International Investment Ltd (PIIL) shares, the Insider Dealing Tribunal heard yesterday. Realight Investment dealing director Diana Foong Pui-ling said this could have happened before the formal announcement of PIIL's new controlling shareholder. Such rumours had been widespread for five months before PIIL informed the public about the sale of its controlling 51 per cent stake on December 16, 1992, she said. Ms Foong said she had bought 2.64 million PIIL shares between December 8 and December 14, 1992, after forecasting that the stake buyers might have major Chinese interests as many active investors did. 'I made the decision after I studied the fundamentals, price changing trends and the two latest announcements of PIIL,' she said. 'Of course, the market movement, my experience and intuition also played some part [in the decision].' She said since June 1992, China state-owned enterprises were rumoured to have stepped up investments in Hong Kong either through listing or acquisition of some small listed companies. The speculation was further fuelled after it was revealed that Tung Wing Steel Holdings was controlled by a consortium which included the state-owned Shougang Corp in October that year. 'We should not forget in November , China Travel Services also got a listing here,' Ms Foong said, adding that the flotation was oversubscribed by about 400 times. She was testifying, as an experienced broker, at a hearing into the alleged insider trading in PIIL shares almost two years ago. PIIL strongly caught Ms Foong's attention on December 1, 1992, when it announced that no negotiations which would be discloseable were taking place. 'I was thinking just in the opposite direction: some important changes within PIIL must be in the air . . . It's likely PIIL would be acquired,' she said. In another announcement a week later, PIIL announced that it was involved in takeover negotiations with other parties. 'Many investors had certainly associated the takeover with Chinese enterprises and made bulk purchases of PIIL shares,' Ms Foong said. Between December 8 and December 14, 1992, Ms Foong said she bought PIIL shares in large blocks three times through accounts of her own, her husband and her sister. She told the tribunal that second and third liners such as PIIL, which were thinly traded at low share prices, were well-known targets for acquisition at that time. The China factor was important in reviving the ailing stock market towards the end of 1992, she said.