A mainland network solutions provider, FS.COM, only corrected its IPO allotment results document on its fifth trading day on the Hong Kong Stock Exchange, although the actual allocation execution was carried out correctly. A banker stated that for such announcements, the sponsor should bear the greatest responsibility. Spokespersons for both the Hong Kong Securities and Futures Commission and the Hong Kong Exchanges and Clearing Limited declined to comment on individual cases.
FS.COM clarified that the allocation execution itself was error-free. The initial allotment results announced by FS.COM on the 20th of this month contained inconsistencies. Firstly, the announcement indicated the number of applications accepted (the number of successful applicants) was 31,492, with no applicants guaranteed at least one lot, suggesting only 31,492 lots were allocated. This differed from the final 40,000 lots offered in the public offering portion. Secondly, calculations based on the announcement data showed the total number of successful applicants in the Group B category (subscription amounts over HK$5 million) was only 5,575, not 11,492.
FS.COM issued a clarification announcement near 9 PM last Friday, updating the Group B allotment results. The corrected number of successful Group B applicants was 11,492, with all Group B applicants guaranteed at least one lot. Specific allocations were detailed: applicants for 2,000 to 4,000 lots received 1 to 2 lots; those for 5,000 to 10,000 lots received 2 to 3 lots; and "top-tier" applicants for 20,000 lots received 3 to 4 lots.
In response to inquiries, FS.COM stated the allocation execution itself was correct. The error stemmed from an omission in the statistical calculation of the "guanteed allotment" portion during the preparation of the initial announcement, leading to incomplete disclosure. The company confirmed the allocation results in the latest announcement should be considered authoritative.
Industry professionals pointed to the sponsor's primary responsibility. A senior banker explained that listed company documents are compiled and verified collaboratively by multiple parties, including the sponsor, lawyers, accountants, and financial printers. An error in one link can create a chain reaction. However, for IPO documents, the sponsor is ultimately the "last gatekeeper," and any mistakes typically fall on them. The banker suggested that for allocation announcements, the sponsor bears the greatest responsibility, noting that their own early career work involved data verification. They observed that with three joint sponsors for this IPO, it appeared oversight was lacking.
Regarding recent proposals to relax restrictions on key personnel simultaneously supervising or participating in up to five active listing mandates, the banker expressed support but emphasized the need for all parties to "fulfill their duties properly."
Another industry insider described the error as unprecedented since the market's establishment, noting it was understandable why regulators had previously issued letters to sponsors reminding them of quality concerns. Earlier this year, the Hong Kong Securities and Futures Commission issued a circular expressing serious concern over issues arising during last year's surge in new listing applications, including significant deficiencies in the preparation of some listing documents, potential misconduct by sponsors, and serious failures in their resource management.
This year, three new listings have issued clarification announcements regarding their allotment results. Minor errors in IPO allotment results, involving wording or data, are not uncommon. However, most are typically corrected with a clarification filing on the listing day or the following day, and such errors seldom involve the "basis of allotment for the Hong Kong public offering" section. So far this year, 34 new stocks have listed in Hong Kong, with three—FS.COM, along with two others—issuing clarified allotment result announcements. Another company, which listed last October, postponed its listing schedule with regulatory approval before its debut, citing the need for additional time to finalize the allotment results.
FS.COM listed last Monday, raising over HK$1.66 billion. Estimated listing expenses are nearly HK$105 million, accounting for 6.3% of the total funds raised. The joint sponsors were China International Capital Corporation, CSC Financial International, and China Merchants Securities International. The public offering received nearly 197,000 applications, representing an oversubscription of approximately 1,578.7 times. The international offering was oversubscribed by 9.9 times. On its first trading day, FS.COM's share price rose 13.5% above its issue price of HK$41.6; by last Friday, it had accumulated a gain of 10.6%.
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