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Chinese agri-tech firm fined millions for illegal Nasdaq listing maneuver

Regulators crack down on a bold SPAC merger that skirted China's overseas listing rules. The case sends shockwaves through firms eyeing foreign markets.

,   and  Administrator
2 min read
The image shows an old Chinese stock certificate with Chinese writing on it. The certificate is...
The image shows an old Chinese stock certificate with Chinese writing on it. The certificate is framed with a border and has text written in both Chinese and English.

Chinese agri-tech firm fined millions for illegal Nasdaq listing maneuver

File photo shows the entrance of the China Securities Regulatory Commission (CSRC) in Beijing, capital of China. (Photo:Xinhua)

The Heilongjiang bureau of the China Securities Regulatory Commission (CSRC), the country's securities regulator, issued a prior notice of administrative penalties against Heilongjiang Zhongneng Liangke Agricultural Technology Co Ltd and relevant parties for violations of overseas listing filing procedures, according to a statement on the CSRC's website on Friday.

It marks the first such case since the implementation of the trial rules governing offshore listings by domestic companies in 2023, involving failure to follow overseas listing filing procedures and an unauthorized overseas listing.

On December 21, 2024, Zhong Guo Liang Tou Group Ltd commissioned its domestic operating entity, Zhongneng Liangke, to submit a filing report to the CSRC. The report proposed an indirect listing on the Nasdaq via a De-SPAC merger transaction, according to the statement.

The statement said the CSRC received the filing materials on March 6, 2025, and requested supplementary documentation. Without completing the filing procedures, Zhong Guo Liang Tou completed a merger with a special purpose acquisition company and was listed on Nasdaq on October 1, 2025. Upon discovering the violation, the CSRC notified US regulators and the exchange under a cross-border regulatory cooperation mechanism. The company was suspended from trading on the day of listing.

The investigation found that Zhongneng Liangke failed to complete the overseas listing filing procedures and proceeded with an overseas listing without approval, in breach of relevant rules. The proposed penalties include a 3 million yuan ($438,800) fine on Zhongneng Liangke, a 1.5 million yuan fine on Jiang Zhenjun, the person directly in charge of the filing, a 500,000 yuan fine on Guangdong Xinyu Law Firm, and a 200,000 yuan fine on Li Huabin, the lawyer who provided the legal opinion, the report said.

Under the relevant rules, the parties concerned have the right to make statements, submit defenses, and request hearings as legally prescribed. The Heilongjiang bureau of the CSRC will issue formal administrative penalty decisions after completing the necessary regulatory enforcement procedures in accordance with the law, the statement noted.

The CSRC will continue to balance opening-up with security, support domestic companies in leveraging "two markets and two resources" to achieve high-quality development. It will strengthen regulation and enforcement over overseas listing activities in accordance with the law, continuously improve the standardization, transparency, and consistency of filing procedures, and enhance cross-border cooperation with overseas regulatory authorities to safeguard normal market order and protect investors' legitimate rights and interests, according to the statement.

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