【Regulatory Action】CITIC Securities Hong Kong and Guotai Junan International Offices Raided; Guotai Junan International: Take it seriously, immediately suspend the duties and powers of employees under investigation; reportedly involving Guotai Junan International ECM executive Pan Ju Peng

Bloomberg, citing sources, reported that Hong Kong authorities conducted a surprise raid on the offices of CITIC Securities Hong Kong and Guotai Junan International (01788) on Tuesday (the 10th), and took at least one senior executive in for questioning. Additionally, Caixin indicated that at least two Chinese-funded investment banks were searched this week, including Guotai Junan International’s ECM head, Samuel Pan, who was taken away by the ICAC for investigation.

Guotai Junan International issued a statement saying that on March 10, the SFC and ICAC visited the company’s main Hong Kong office to execute a search warrant, confiscated some documents, and detained a staff member (not a board member) for investigation. The company attaches great importance to this matter and will continue to closely monitor its development.

Guotai Junan International stated that, in light of the investigation, all operations, duties, and powers of the relevant employee have been immediately suspended as of March 10 until further notice. The group’s overall business and operations, including investment banking, remain normal. The company’s finances are stable, and all business activities are conducted in compliance and in an orderly manner. The group remains committed to compliance and prudent management.

According to LinkedIn, Pan Jupeng has been with Guotai Junan International since June 2015 and was promoted to Managing Director and ECM head in June 2024. Prior to that, he worked at Morgan Stanley as an analyst and manager, accumulating extensive investment banking experience.

Market speculation suggests that the raid may be related to an IPO. CITIC Securities Hong Kong and Guotai Junan International have jointly served as sponsors for several Hong Kong listings, such as the recently approved logistics robot company KAILUOSHI and the January-listed Stand Robotics.

The SFC declined to comment, and the ICAC has not responded to requests for comment; CITIC Securities Hong Kong and Guotai Junan Hong Kong also did not respond immediately.

This surprise raid comes at a time of significant recovery in Hong Kong’s capital markets. Over the past year, trading volume surged, and a wave of IPOs worth billions of dollars emerged. While the specific nature of the investigation remains unclear, authorities have increased their focus on investment activities.

Source: Guotai Junan International Announcement