Core Viewpoint - The Hong Kong Stock Exchange (HKEX) reprimanded Fuhong Hanlin (02696.HK) and its former CEO Liu Shigao for failing to fulfill due diligence obligations regarding a significant investment management agreement that misallocated $117 million (approximately 840 million RMB) of IPO proceeds [1][5][6]. Group 1: Regulatory Actions - HKEX required Liu Shigao to undergo 26 hours of compliance training to continue serving as a director of a listed company [1][5]. - The reprimand was based on Liu's failure to review an important investment management agreement that allowed 29% of the IPO proceeds to be used for investments [1][4]. Group 2: Investment Management Agreement - The investment management agreement was signed by the CFO on behalf of Fuhong Hanlin, designating a company to manage the $117 million raised during the IPO [4][6]. - The funds were reportedly used by the managing company to subscribe to bonds and purchase promissory notes issued by private entities [2][8]. Group 3: Financial Impact - As of the end of 2024, Fuhong Hanlin had $66.36 million (approximately 47 million RMB) in unrecovered investment funds [3][10]. - The company has taken legal action to recover the outstanding investment amount, which has been classified as accounts receivable [10]. Group 4: Corporate Governance - Liu Shigao did not participate in the agreement's establishment process and failed to present it to the board for review [5][6]. - The company has experienced significant turnover in its CFO position, with four different CFOs since its IPO [10].