A seemingly routine Hong Kong stock placement has become complicated due to a sudden regulatory investigation. Recent announcements show that China International Capital Corporation (CICC) and Huatai International have withdrawn from a share placement transaction involving Infini Capital. The deal was initiated by Black Sesame, a company labeled as the "first AI chip stock for smart cars," which listed in August 2024.

Infini Capital is now involved in a regulatory storm. Last week, market sources reported that Infini Capital's offices were raided by Hong Kong authorities. Although not officially named, the news has had a significant impact. The situation dates back to March 12, when Hong Kong's Securities and Futures Commission (SFC) announced a joint operation with the Independent Commission Against Corruption (ICAC) codenamed "Fuse," conducted from March 10 to March 11, targeting insider trading and corruption. According to the SFC, the operation involved searches at 14 locations, including the offices of involved companies and the residences of related individuals, leading to the arrest of six men and two women aged between 35 and 60. Among those taken in for questioning were senior executives from two licensed securities firms and a licensed hedge fund management company, as well as a middleman. Hong Kong regulators suspect that executives from the involved brokerages accepted over HK$40 million in bribes from the actual controller of the hedge fund management company, leaking details of several Hong Kong-listed company share placements before the information was made public. Using this confidential information, the hedge fund management company allegedly established short positions by short-selling the related stocks and/or entering into short equity swap contracts. They then profited after the placement news was publicized and stock prices declined. Regulators estimate that the hedge fund involved accumulated profits of approximately HK$3.15 billion from these activities. Although the official announcement did not directly name the institutions involved, Guotai Junan International and CITIC Securities subsequently confirmed that their Hong Kong offices had been searched and documents were taken. In response to the rumors, Infini Capital issued a statement on the evening of March 13, noting it was aware of the market speculation but would defer to regulatory announcements and refrain from commenting on unverified information. The company emphasized its consistent adherence to Hong Kong laws and regulatory requirements and its full cooperation with legitimate regulatory work. Infini Capital also stated that its overall business and operations continue normally, with investment management and decision-making processes unaffected. Founded in 2015 by former Morgan Stanley investment banker Qian Tao, the hedge fund management company has been highly active in Hong Kong's IPO and placement markets in recent years. In 2021, its flagship fund, the Infini Master Fund, achieved a 96% return, significantly outperforming other Asian peer funds. By 2025, Infini Capital frequently appeared in major placement deals. According to incomplete statistics, it participated in placements for five Hong Kong stocks, including SENSETIME-W, GCL TECH, CHINA RUYI, WEIMOB INC, and Black Sesame, involving a total of over HK$140 billion. Notably, in a July 2025 placement for SENSETIME-W, Infini Capital was the sole subscriber, purchasing 167 million Class B shares. Guotai Junan International and CLSA were the placement agents for that transaction.

Following the regulatory investigation, another recent deal involving Infini Capital—a placement for Black Sesame—has drawn attention. On March 10, Black Sesame announced on the Hong Kong Exchange that it conditionally agreed to place 33.5446 million new shares to Infini Capital's flagship fund, the Infini Global Master Fund. The new shares represented about 4.75% of the enlarged share capital, with a placement price of HK$18.88 per share, a 2.13% discount to the closing price of HK$19.29 on March 9. This would raise approximately HK$633 million. The announcement disclosed that CICC and Huatai International had agreed to act as Black Sesame's agents and use their best efforts to facilitate the fund's subscription. According to the company's plan, 50% of the net proceeds from the placement were earmarked for R&D of a new generation of high-performance chips and the establishment of overseas R&D centers, 40% for product commercialization and market expansion, and 10% for working capital. However, the situation changed within days. On the morning of March 19, Black Sesame announced that, following the placement agents' decision to terminate their cooperation, the company had signed termination agreements with CICC and Huatai International on March 18. It is important to note that while the cooperation with the placement agents has ended, Black Sesame emphasized that the subscription agreement with Infini Capital remains valid and binding. In other words, the funding is not necessarily lost, but its finalization depends on whether the conditions under the subscription agreement can be met or waived. Due to the agents' withdrawal, the company no longer needs to pay related commissions. The originally estimated net proceeds of approximately HK$631 million have now increased to about HK$632 million. The company's board also stated that terminating the cooperation has no significant adverse impact on its existing business, operations, or financial condition. This is not the first time Black Sesame has raised funds through a placement. As early as February 2025, the company completed a share issuance with CICC and Huatai International as placement agents, raising net proceeds of approximately HK$1.237 billion. By the end of January 2026, about HK$827 million of that amount had been used, with the remaining HK$410 million held as short-term deposits in licensed financial institutions. Connecting the timeline reveals that the disruption in this placement coincides with the Hong Kong regulators' raid on a hedge fund management company. Although Black Sesame insists the subscription agreement is still effective, with the regulatory cloud still looming, the financing intended for corporate R&D now faces uncertainty.