CHABAIDAO (02555.HK): SFC Halts Trading Over Suspected IPO Manipulation
- The nine entities in the first suspected syndicate are Sun Ran, a licensed representative of Harvest Global Investments Limited, and eight related companies incorporated in the British Virgin Islands, Seychelles and Samoa; the three entities in the second syndicate are Liu Haoran, The Reynold Lemkins Group (Asia) Limited and Kaufmann & Company Pan-Asia Limited, with the restriction notices issued under sections 204 and 205 of the Securities and Futures Ordinance.
- The SFC noted that part of the IPO proceeds may have been diverted away from the listed companies under undisclosed agreements with the syndicates for so-called investments in financial products, which may have facilitated the secret return of IPO proceeds to major IPO placees or their connected persons.
- Chabaidao has been listed on the Main Board since 23 April 2024; Cloudbreak Pharma Inc. (02592.HK) has been listed since 3 July 2025 and the SFC directed a suspension of trading in its shares on 10 September 2026; Tianju Dihe (Suzhou) Technology Co., Ltd. (02479.HK) has been listed since 28 June 2024 and trading in its shares has been suspended since 1 April 2025.
NewTimeSpace News: On 13 October 2026, the Securities and Futures Commission (SFC) announced that it has taken action against two syndicates suspected of participating in fraudulent schemes to create a false or misleading appearance of demand for shares in initial public offerings (IPOs). The SFC also directed The Stock Exchange of Hong Kong Limited, under section 8(1) of the Securities and Futures (Stock Market Listing) Rules, to suspend trading in the shares of Sichuan Baicha Baidao Industrial Co., Ltd. (Chabaidao, stock code: 02555) with effect from 9:00 a.m. that day. The SFC said it is highly concerned that Chabaidao's IPO may have been artificially manipulated, and that suspending trading during its ongoing investigation is necessary or appropriate to maintain an orderly and fair market in the shares and to safeguard the investing public.
For the first suspected syndicate, the SFC issued restriction notices to six brokers, prohibiting them from disposing of or dealing with assets in client accounts held by Sun Ran and eight related companies, up to HKD 4,379,463,215, the highest restriction amount in the SFC's history for cases of this kind; the syndicate is suspected of participating in fraudulent schemes relating to the IPOs of Cloudbreak Pharma Inc. (02592.HK) and Chabaidao. For the second suspected syndicate, the SFC issued restriction notices to 29 brokers in respect of assets in client accounts held by Liu Haoran, The Reynold Lemkins Group (Asia) Limited and Kaufmann & Company Pan-Asia Limited, up to HKD 285,030,265; that syndicate is suspected of participating in a fraudulent scheme relating to the IPO of Tianju Dihe (Suzhou) Technology Co., Ltd. (02479.HK).
The SFC noted that part of the IPO proceeds may have been diverted away from the listed companies under undisclosed agreements between them and the syndicates for so-called investments in financial products, which may have facilitated the secret return of IPO proceeds to major IPO placees or their connected persons. SFC Chief Executive Officer Ms Julia Leung said market integrity and soundness are the cornerstone of a fair capital market and genuine investor confidence, and that the SFC has a zero-tolerance policy towards any form of IPO manipulation, price rigging or false market creation. The brokers that received the restriction notices are not the subjects of the SFC's investigation, and the notices do not affect their operations or their other clients; as the investigation is ongoing, the SFC will not comment further.
