Core Viewpoint - The Hong Kong Stock Exchange has issued a disciplinary action statement against Fuhong Hanlin (02696.HK), a stock that has seen a fivefold increase in value this year, due to issues related to its former CEO Liu Shigao and the misuse of IPO proceeds [1][2][3]. Group 1: Company Background - Fuhong Hanlin was listed on September 25, 2019, raising a net amount of HKD 31.47 billion (approximately USD 4.03 billion) [6]. - The company appointed Sun Hung Kai Financial as the joint bookrunner and underwriter for its IPO, which included a placement that raised about USD 1.17 billion, accounting for 29% of the IPO proceeds [6]. Group 2: Misuse of IPO Proceeds - The investment management agreement signed on the first day of listing allowed Fuhong Hanlin to invest USD 1.17 billion, which did not align with the intended use of IPO proceeds as stated in the prospectus [7]. - The prospectus indicated that the funds were primarily for clinical trials and regulatory filings, with only 10% allocated for working capital and general corporate purposes [7]. Group 3: Disciplinary Actions - Liu Shigao, the former CEO, is required to complete 26 hours of training on regulatory and legal issues before being eligible for any directorship in listed companies [2]. - The Hong Kong Stock Exchange criticized Liu for failing to fulfill his director responsibilities, particularly in approving management fees without proper review of the investment management agreement [8][9]. Group 4: Financial Impact - From 2020 to 2022, Fuhong Hanlin recovered a total of USD 30.64 million from Sun Hung Kai Financial, with an additional USD 20 million recovered in 2023 [11]. - As of June 30, 2025, the outstanding balance of investments in Sun Hung Kai Financial was USD 66.36 million (approximately RMB 475 million) [11]. - The company has recognized an impairment loss of RMB 475 million related to receivables from Sun Hung Kai Financial as of June 30, 2025 [12].
港股5倍大牛股遭港交所谴责，挪用IPO募资，“血亏”超4亿元