SFC takes action against suspected IPO-rigging syndicates and suspends dealings in Baicha shares

The Securities and Futures Commission (SFC) 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).

The SFC has also directed The Stock Exchange of Hong Kong Limited (SEHK) to suspend dealings in the shares of Sichuan Baicha Baidao Industrial Co., Ltd. (Baicha) (Stock Code: 02555) under section 8(1) of the Securities and Futures (Stock Market Listing) Rules (SMLR), with effect from 9:00 am today (Notes 1 and 2).

The SFC has serious concerns that Baicha’s IPO may have been rigged to create an artificial impression of demand for Baicha’s shares. The suspension is necessary or expedient to maintain an orderly and fair market in Baicha’s shares and to protect the interests of the investing public while the SFC’s investigation continues.

In relation to the first suspected syndicate, the SFC has issued restriction notices to six brokers prohibiting them from dealing with or processing assets of up to $4,379,463,215, the largest amount of its kind in the SFC’s history, held in client accounts in the names of Ms Sun Ran and eight related companies namely, Avant Team Limited, Citadel Wealth Limited, Fortuna Capital Management Limited, Gemstone Capital Management Limited (not the Hong Kong corporation licensed with the SFC), Generations Capital Management Limited, Panda Capital Management Limited, Prudent Wealth Global Inc and Timeless Capital Management Limited (Nine Entities). The first suspected syndicate is suspected of being involved in fraudulent schemes relating to the IPOs of Cloudbreak Pharma Inc. (Cloudbreak) and Baicha (Notes 3 to 7). 

In relation to the second suspected syndicate, the SFC has issued restriction notices to 29 brokers prohibiting them from dealing with or processing assets of up to $285,030,265 held in client accounts in the names of Mr Liu Haoran, The Reynold Lemkins Group (Asia) Limited and Kaufmann & Company Pan-Asia Limited (Three Entities). The second suspected syndicate is suspected of being involved in a fraudulent scheme relating to the IPO of Tianju Dihe (Suzhou) Technology Co., Ltd. (Tianju Dihe) (Notes 8 to 10).

The suspected syndicates are suspected of being involved in fraudulent schemes under which portions of IPO proceeds may have been transferred out of listed companies for purported investments in financial products under undisclosed agreements between those companies and the syndicates. These agreements may have enabled IPO proceeds to be secretly channelled back to major IPO placees or their connected parties.

The brokers who received the restriction notices are not the subjects of the SFC’s investigations. The restriction notices do not affect the brokers or their other clients.

The restriction notices prohibit the relevant brokers, without the SFC’s prior written consent, from:

• disposing of or dealing with, or assisting, counselling or procuring another person to dispose of or deal with, the relevant assets in any way; and

• executing any instructions given directly or indirectly by the Nine Entities or the Three Entities.

The relevant brokers are also required to notify the SFC immediately upon receiving any instructions concerning the prohibited assets.

The SFC considers that issuing the notices to preserve assets is desirable in the interest of the investing public and in the public interest. Parties involved may be ordered to compensate affected investors through a restitution process in the future.

“Market integrity is the bedrock of fair capital markets and true investor confidence. We maintain a zero-tolerance policy toward any form of IPO rigging, price manipulation, or the creation of a false market,” said Ms Julia Leung, the SFC’s Chief Executive Officer. “The SFC’s regulatory actions are highly focused and proportionate in practice. We are committed to fostering an environment conducive to nurturing a virtuous cycle of sustainable market developments.”

The SFC’s Executive Director of Enforcement, Mr Michael Duignan, said: “We believe that the actions taken to date have significantly disrupted two suspected syndicates which may have been involved in IPO-rigging cases. By suspending dealings in Baicha and preserving assets linked to the suspected schemes, we are acting decisively to protect investors and uphold the integrity of Hong Kong’s markets. These actions are also intended to help enhance confidence in the fairness and integrity of Hong Kong’s IPO market.”

The SFC’s investigations are continuing. The SFC will not make any further comments while the investigations are underway.

End

Notes:

1. Under section 8(1) of the SMLR, the SFC has the power to direct the SEHK to suspend dealings in shares of a listed company where:

   a. any materially false, incomplete or misleading information has been included in any document issued in connection with a listing of securities or in announcement, statement, circular or other document made or issued by it or on its behalf;

   b. it is necessary or expedient in the interest of maintaining an orderly and fair market in securities traded on the SEHK;

   c. it is in the interest of the investing public or in the public interest, or it is appropriate for the protection of investors generally or for the protection of investors in the shares of the listed company; or

   d. there has been a failure to comply with any condition imposed by the board of the SFC when permitting resumption of trading under section 9(3)(c) of the SMLR.

2. Sichuan Baicha Baidao Industrial Co., Ltd. was listed on the Main Board of the SEHK since 23 April 2024.
3. Cloudbreak Pharma Inc. was listed on the Main Board of the SEHK since 3 July 2025. The SFC directed the SEHK to suspend dealings in its shares on 10 September 2026. For further details, please refer to the SFC’s press release dated 10 September 2026. 
4. The SFC issued the restriction notice under sections 204 and 205 of the Securities and Futures Ordinance (SFO). 
5. Ms Sun Ran is a licensed representative of Harvest Global Capital Investments Limited, a corporation licensed under the SFO to carry on Type 1, 4 and 9 regulated activities. 
6. Citadel Wealth Limited, Fortuna Capital Management Limited, Gemstone Capital Management Limited, Generations Capital Management Limited, Panda Capital Management Limited and Prudent Wealth Global Inc are companies incorporated in the British Virgin Islands.  Avant Team Limited is a company incorporated in the Republic of Seychelles. Timeless Capital Management Limited is a company incorporated in the Independent State of Samoa. 
7. The six brokers are China International Capital Corporation Hong Kong Securities Limited, CMB International Securities Limited, Futu Securities International (Hong Kong) Limited, Haitong International Securities Company Limited, Harvest Global Capital Investments Limited and Valuable Capital Limited.
8. The Reynold Lemkins Group (Asia) Limited and Kaufmann & Company Pan-Asia Limited are companies incorporated in Hong Kong.
9. Tianju Dihe (Suzhou) Technology Co., Ltd. was listed on the Main Board of the SEHK since 28 June 2024. Dealings in its shares have been suspended since 1 April 2025. 
10. The 29 brokers are Aristo Securities Limited, Cheer Union Securities Limited, China Galaxy International Securities (Hong Kong) Co., Limited, China International Capital Corporation Hong Kong Securities Limited, China Securities (International) Brokerage Company Limited, CITIC Securities Brokerage (HK) Limited, CMB International Securities Limited, Funde Securities Limited, Futu Securities International (Hong Kong) Limited, Get Nice Securities Limited, Grand China Securities Limited, Guosen Securities (HK) Brokerage Company Limited, Huatai Financial Holdings (Hong Kong) Limited, Orient Securities (Hong Kong) Limited, Patrons Securities Limited, Phillip Securities (Hong Kong) Limited, Ping An Securities (Hong Kong) Company Limited, Quam Securities Limited, Rifa Securities Limited, Ruibang Securities Limited, SBI China Capital Financial Services Limited, SDIC Securities (Hong Kong) Limited, Sunhigh Financial Holdings Limited, Tiger Brokers (HK) Global Limited, TradeGo Markets Limited, uSmart Securities Limited, Valuable Capital Limited, Yunfeng Securities Limited and Zhongtai International Securities Limited.