Hong Leong Bank, which is under investigation for allegedly banning margin financing on a list of hundreds of stocks, denied in reports on Thursday that it had drawn up the controversial list.

News of the list of more than 400 stocks and financial instruments sparked a sell-down of smaller counters last week and prompted the government to announce a probe into market manipulation.

"There have been a number of inaccuracies in some articles published in recent weeks. The bank does not have a list of over 400 non-marginable stocks," Hong Leong's group managing director Yvonne Chia told local media.

Allegations that several banks were involved in the ban, which is designed to limit their trading risk, last week prompted panic on the bourse.

The developments added to growing confusion over the reasons for volatility in the stock market, which has seen lower-liner share prices plunging since May.

Banks and analysts say stock syndicates and manipulators are at least partially to blame.

List of designated stocks

Chia said Hong Leong only had a list of 184 "designated stocks" for which financing approval must be sought from its head office, which would consider lending on issues of "concentration, price, liquidity and compliance".

She added that Hong Leong Bank and its parent company Hong Leong Credit were included in the designated stocks list for compliance reasons.

"Regrettably, such internally classified designated stocks have been misconstrued by some to be non-marginable stocks," she said.

Prime Minister Abdullah Ahmad Badawi has given the Securities Commission a one-month deadline to look into the reasons behind the volatility.

"I can't say for sure the extent of the manipulation , but looking at the condition of the market, it has to be something that has to be looked at seriously," he was quoted as saying by the Business Times .

"We cannot let manipulation of the share market continue as it not only affects the market but has severe repercussions on investors and shareholders of registered companies," he said.