(Yicai Global) March 7 -- ALMT, a shareholder in Xiamen Tungsten, was cautioned by the Shanghai Stock Exchange yesterday for failing to disclose that its stake in China’s largest tungsten producer has been reduced by more than 5 percent, and for continuing to trade in the stock.

ALMT owned a 5.08 percent share of Xiamen Tungsten as of Jan. 27 last year, down from 10.2 percent in March 2006, the Shanghai bourse said. Of this, ALMT sold 2.64 percent, and the rest was the result of a dilution caused by Xiamen Tungsten’s private placements and the buyback of stocks.

Not only did ALMT not disclose the reduction of its shareholding by more than 5 percent, as is required, but it reduced its stake further between Jan. 7 and Jan. 27 last year, the bourse said. This prompted the sending of the warning letter as the stock should not be traded within three days of a more-than-5-percent reduction.

The securities regulator will query when a company’s shareholding in a listed firm is reduced by more than 5 percent, whether it is through the direct sale of stock or due to the dilution caused by private placements and other means. Although a warning letter has been sent, the violations are not serious enough for an administrative penalty.

ALMT sold a 0.08 percent stake in Xiamen Tungsten through block trading on March 2, lowering its stake to 5 percent, Xiamen Tungsten said in a previous announcement.

Xiamen Tungsten’s share price [SHA:600549] closed down 1.5 percent at CNY21.19 (USD3) apiece today.

Editor: Kim Taylor