"Because D1 is classified as a cash company, it is obliged to meet the SET's criteria and conduct its business in accordance with the regulations for a listing of ordinary shares within nine months (before July 1, 2007), including the condition of a silent period. D1 [Dragon One] must specify the shareholders of 65 per cent of its paid-up capital - and other securities convertible to shares - that are subject to the prohibition of share selling," said the SET. Shareholders who are part of the management are allowed to sell shares amounting to only 25 per cent of the company's paid-up capital at the end of every six months during the 18-month-long silent period, the statement said.

Earlier, Dragon One announced it would allocate 60 million new shares to five specific investors through private placement from November 17-20.

Company president and CEO Jrarat Pingclasai, said his shares and those to be sold to the five investors were not subject to the silent-period regulation as applied to newly listed firms. One of the five investors is Application Hosting, a subsidiary of Dragon One.

Dragon One's case has become controversial. The company has repeatedly insisted its major shareholders should be exempted from the silent-period rule, because it gained listing status through a "back-door" listing by taking over Diana Department Store and was therefore not a newly listed company. Jrarat held almost 80 per cent of the shares after taking over Diana in July. The company later raised its capital two or three times.

SET data show that as of September 5, Jrarat held 30.13 per cent of Dragon One and Sumit Champrasit, chairman of International Engineering's executive committee, 4 per cent.

The stock yesterday fell 4.24 per cent to close at Bt2.26.

Following the SET statement, Dragon One said it had not yet submitted to the SET its reapplication for listing, so it could not declare any clear or concrete resolution regarding the company's listing status.

"In any event, D1 has until July 1, 2007 - as stated by the SET - to meet all the requirements stipulated by the SET regarding its reapplication for listing, and Dragon One's management is well aware of the rules and guidelines stipulated by the SET regarding this matter," said the company.

Meanwhile, Dragon One reported it held a 25.01-per-cent stake in Chaiyo Productions, after buying 600,000 shares from existing shareholders and exercising its right to subscribe to 2.89 million capital-increase shares.