Hong Kong SFC Acts on Suspected IPO Rigging: ChaPanda Halted, 35 Brokers Served Restriction Notices, Up to About HK$4.66 Billion Frozen
HONG KONG — The Securities and Futures Commission (SFC) announced on October 13 that it has taken action against two groups suspected of being involved in fraudulent schemes to create a false or artificial appearance of demand for shares in initial public offerings (IPOs), and has directed The Stock Exchange of Hong Kong Limited to suspend dealings in the shares of Sichuan Baicha Baidao Industrial Co., Ltd. (ChaPanda, 02555.HK) under section 8(1) of the Securities and Futures (Stock Market Listing) Rules, with effect from 9:00 am that day. The SFC said it has serious concerns that ChaPanda's IPO may have been rigged to create an artificial impression of demand for its shares, and that the suspension is necessary to maintain an orderly and fair market and to protect the investing public while its investigation continues.
The first suspected syndicate is linked to Sun Ran and eight related companies — referred to by the SFC as the Nine Entities: Avant Team Limited, Citadel Wealth Limited, Fortuna Capital Management Limited, Gemstone Capital Management Limited, Generations Capital Management Limited, Panda Capital Management Limited, Prudent Wealth Global Inc and Timeless Capital Management Limited. The SFC specifically noted that this Gemstone Capital Management Limited is not the Hong Kong corporation licensed by the SFC of the same name. The syndicate is suspected of involvement in fraudulent schemes relating to the IPOs of Cloudbreak Pharma Inc. (02592.HK) and ChaPanda. The SFC has issued restriction notices to six brokers prohibiting them from dealing with or processing assets held in client accounts in the names of the Nine Entities, up to HK$4,379,463,215 — the largest amount of its kind in the SFC's history.
The second suspected syndicate is linked to Liu Haoran and two companies, The Reynold Lemkins Group (Asia) Limited and Kaufmann & Company Pan-Asia Limited — the Three Entities — and is suspected of involvement in a fraudulent scheme relating to the IPO of Tianju Dihe (Suzhou) Technology Co., Ltd. (02479.HK). The SFC has issued restriction notices to 29 brokers covering assets of up to HK$285,030,265. In total, the SFC issued restriction notices to 35 brokers, with combined assets restricted of up to about HK$4.66 billion (about US$594 million).
According to the SFC, the suspected schemes involved portions of IPO proceeds being transferred out of the listed companies for purported investments in financial products under undisclosed agreements between those companies and the syndicates; the agreements may have enabled the proceeds to be secretly channelled back to major IPO placees or their connected parties, creating a false impression of demand. The SFC said issuing the notices to preserve assets is desirable in the interest of the investing public and the public interest, and that parties involved may in future be ordered to compensate affected investors through a restitution process.
The SFC also made clear that the brokers who received the restriction notices are not themselves the subjects of its investigations, and that the notices do not affect the brokers or their other clients. Without the SFC's prior written consent, the brokers may not dispose of or deal with the relevant assets, nor execute any instructions given directly or indirectly by the Nine Entities or the Three Entities, and must notify the SFC immediately upon receiving any instructions concerning the prohibited assets.
ChaPanda was the only stock whose trading the SFC directed to be suspended in this action. Cloudbreak Pharma and Tianju Dihe are also currently suspended, but for different reasons and from different dates: according to Cloudbreak Pharma's announcement on the stock exchange, its shares have been suspended at the SFC's direction since September 10 this year over concerns that its IPO may have been rigged, while Tianju Dihe has been suspended since April 1, 2025 for failing to publish its financial results on time, according to its announcements. References in some reports to "three suspended stocks" mean the three companies are all halted at present, not that all three were halted on October 13.
ChaPanda listed on the Main Board on April 23, 2024 at HK$17.50 per share, offering about 147.8 million shares and raising about HK$2.59 billion, making it Hong Kong's largest IPO of that year; its public offer was only about 0.5 times subscribed and it had no cornerstone investors. On October 12, the last trading day before the suspension, ChaPanda closed at HK$4.035, about 77% below its offer price.
The SFC stressed that these are allegations under investigation; no findings have been made and there have been no convictions, and it would not comment further while the investigation continues. ChaPanda published an announcement on the stock exchange on the evening of October 14 in response to the suspension, and Hang Seng Indexes Company has announced the stock's removal from its indexes (see GSM's earlier report). (Sources: SFC press release of October 13; company announcements on HKEXnews)
Source: GSM · USA (original Chinese edition)
Photo: 图：茶百道（ChaPanda）门店（资料图）。Pscmaczilhca 摄，CC0，取自维基共享资源。Photo: a ChaPanda store (file photo). By Pscmaczilhca, CC0, via Wikimedia Commons.
- 2026-10-13Hong Kong SFC Acts on Suspected IPO Rigging: ChaPanda Halted, 35 Brokers Served Restriction Notices, Up to About HK$4.66 Billion FrozenThis story
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