On October 14, CHABAIDAO (HKEX: 02555) published an announcement on the Hong Kong Stock Exchange, responding to the matter of "alleged IPO fraud." The company's board of directors noted that the Hong Kong Securities and Futures Commission (SFC) suspended trading in the company's H shares starting at 9:00 a.m. on October 13. The SFC stated that it is concerned the company's initial public offering may have been artificially manipulated to create a false appearance of demand for its shares. The board of directors of CHABAIDAO places great importance on this matter and firmly believes that compliance with all applicable laws and regulations is of the utmost importance.
CHABAIDAO further stated that the company is urgently seeking legal advice regarding the directive and will work to address and resolve the concerns raised by the Hong Kong SFC. The company is committed to fully cooperating with the Hong Kong SFC in handling any of its concerns and will issue further announcements in due course. The company confirms that its business operations remain normal, and as of the date of this announcement, there have been no material changes to the group's business operations.
On October 13, CHABAIDAO's shares were suddenly suspended from trading on the Hong Kong Stock Exchange, with no resumption date announced. According to the exchange's announcement, the suspension was directed by the Hong Kong Securities and Futures Commission (SFC) under Section 8(1) of the Securities and Futures (Stock Market Listing) Rules, and was executed by the Hong Kong Stock Exchange to halt trading in CHABAIDAO's shares.
On the afternoon of the same day, the Hong Kong SFC issued a further statement regarding the suspension of CHABAIDAO's trading: "The initial public offering of CHABAIDAO may have been artificially manipulated with the intention of creating a false appearance of demand for its shares. While the SFC continues its investigation, suspending trading in CHABAIDAO's shares is necessary or appropriate to maintain an orderly and fair market for the stock and to protect the interests of the investing public."
The announcement also noted: "Some of the IPO proceeds may have been diverted away from the relevant company for so-called financial product investments pursuant to undisclosed agreements between the listed company and such parties. These agreements may have facilitated the undisclosed channeling of IPO proceeds back to major IPO placees or their connected persons."
Comments