That's because you changed the ownership after setuid is set!
Change the ownership of the file first, set what the owner can do then and only then set the setuid
What i mean on the 2nd clause is if owner is suppose to execute the file give it (x) permissions.
http://www.cyberciti.biz/faq/unix-bs...x-setuid-file/
If setuid bit turned on a file, user executing that executable file gets the permissions of the individual or group that owns the file.
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