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SCMP Reporter

DON Lau Yuen-leung told two witnesses that he had no inside information when he bought a large block of Public International Investments Ltd (PIIL) shares, the Insider Dealing Tribunal heard yesterday.

  During an eight-hour hearing yesterday, the witnesses quoted Don Lau as making the claim on two different occasions.

  They were testifying at a hearing into alleged insider trading in shares of PIIL.

 Don Lau said it was not until the afternoon of December 8, 1992, that he learned of the identities of stake buyers in PIIL, according to Derrick Lau, former manager of corporate finance at Nikko Securities (Asia).

  It was the first testimony the tribunal had heard about when Don Lau first knew the names of stake buyers in PIIL - Gower Investment and Artrel.

  Derrick Lau, who is not related to Don Lau, said his former boss made the claim at Nikko's corporate finance office in August this year, when the Securities and Futures Commission (SFC) was preparing to bring the case to the tribunal.

  'However, at that time, he [Don] did not mention he had bought PIIL shares on December 8 [1992],' said Derrick Lau.

  According to a statement released by the tribunal, Don Lau had bought 240,000 PIIL shares in the morning of December 8, 1992, through his relatives' accounts.

  On December 7, 1992, Don Lau was appointed as an independent financial adviser to the minority shareholders of PIIL in relation to the sale of the company's controlling stake.

  Don Lau is a former managing director of corporate finance at Nikko.

  'If I was directly involved in the [PIIL takeover] transactions, I would not have bought the shares because I don't want to get into trouble,' Derrick Lau said.

  The tribunal also heard yesterday that Don Lau had told the SFC on December 7, 1992, that he did not know the identities of the stake buyers in PIIL.

  Alan Kenneth Mercer, former senior manager of corporate finance at SFC, said Don Lau made the claim on the phone on December 7, 1992, as Mr Mercer was commenting on a draft announcement submitted by him.

  The announcement, published the next day, was in fact a statement Don Lau drafted on behalf of PIIL which informed the public of the ongoing takeover negotiations but not stake buyers' names.

  'He [Don] told me that although Nikko did not know who the third parties were, he believed them to be a consortium in which Cheung Kong and a mainland party were involved,' said Mr Mercer.

  Mr Mercer was responsible for vetting documentation in relation to takeovers and mergers of all listed companies in Hong Kong before leaving the SFC last year.

  The tribunal was also told that on December 8, Mr Mercer had questioned Don Lau on the phone, asking why he had excluded the buyers' names in the previous day's announcement.



Lau denied inside knowledge of takeover, witnesses tell tribunal