A major development has occurred concerning IPO-related corruption in Hong Kong. The Independent Commission Against Corruption (ICAC) conducted surprise raids this week, targeting investment banking staff from at least two Chinese-backed securities firms in Hong Kong. The operation involved unannounced searches and the taking of individuals away to assist with investigations.

Specifically, Samuel Pan, the Head of Equity Capital Markets (ECM) at Guotai Junan International, was taken away by the ICAC to assist in the investigation. Concurrently, CITIC SEC also confirmed that its premises were subjected to a surprise raid by the ICAC. Details regarding the specific individuals questioned or the precise matters under investigation are not yet fully known.

The investigations are believed to be connected to several potential issues, including insufficient due diligence by sponsors, potential collusion with market makers to manipulate stock prices through schemes like "pump and dump," and possible problems related to利益输送 (benefit transfer) or corruption, which is a primary reason for the ICAC's involvement.

The report also references a letter sent by the Hong Kong Securities and Futures Commission (SFC) at the end of January 2026, indicating the regulator's high level of concern regarding the surge in new listing applications in Hong Kong during 2025.