Lishi International (0842.HK) Suspected of Market Manipulation Hong Kong Retail Investors Collective Rights Protection

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Sina Finance received multiple reports on April 2, accusing battery manufacturer Leechee International (0842.HK) of suspected market manipulation, insider trading, and fraud. Some investors told Sina Finance that they have reported to the Hong Kong Securities and Futures Commission and plan to initiate class-action lawsuits using the “shareholder representative” mechanism.

Since 2026, Leechee International (0842.HK) stock price has experienced significant fluctuations.

At the end of last year, Leechee International announced plans to spin off its overseas subsidiary Leoch Energy for listing in the United States, with the spin-off conducted via in-kind distribution, not involving cash settlement. That is, holders of Leechee International shares before the ex-dividend date will receive overseas company shares, while those holding shares after the ex-dividend date will not be allocated overseas shares. The ex-dividend date was January 9 of this year.

On January 9, Leechee International’s stock price plummeted sharply, closing down 62.65%, with net main capital outflow of HKD 2.6745 million and a trading volume of HKD 13.42 million.

On April 1, after-hours, the company disclosed that the spin-off plan had “fallen through,” and during the earnings conference, the company stated it was due to tightening US regulations.

On April 2, the stock price rebounded sharply, with a maximum increase of 107%.

Investors believe that Leechee International’s major shareholders deliberately announced the spin-off to create negative market sentiment, causing the stock to plunge after the ex-dividend date to buy low and harvest retail investors, and ultimately, after the failure was announced, the asset return caused the stock to surge. The tactics are suspected of market manipulation and fraud.

Retail investors believe that the ex-dividend action is irreversible; once it occurs, the stock price usually remains low. When the company then announces termination, it is akin to legally “robbery” of retail investors’ chips under the rules.

However, the company previously announced that it does not guarantee the successful completion of the spin-off plan.

Sources revealed that Leechee International’s overseas business company has already moved to Singapore, and some senior executives may have also completed cashing out and transferred to Singapore.

Data shows that before the spin-off on January 8, 2026, major brokerages held positions in Bank of China International, Morgan Stanley, etc., with stable trading and an average daily turnover of about HKD 5 million; before the suspension of the spin-off from January to March, some brokerages slightly reduced their holdings, trading was sluggish, with daily turnover less than HKD 1 million. After the spin-off was suspended on April 2, CCASS data shows that major brokerages held positions in UBS, HSBC, etc.

Investors currently hope that the Hong Kong Securities and Futures Commission (SFC) monitors the trading records of major shareholders, their relatives, senior management, and key suppliers to see if there was a large increase in holdings from January to March this year, and whether there are large accounts with the same address or broker account in the shareholding list.

Additionally, they want to trace and review the “real reason” for the termination of the spin-off and the motivation behind the ex-dividend action.

Regulatory: No investigation or penalty announcements

As of now, the Hong Kong SFC, HKEX, and other regulatory agencies have not issued any investigation notices, inquiries, or penalty decisions regarding market manipulation by Leechee International, nor are there any related judicial proceedings or case records.

The reporter has sent a letter to the Hong Kong SFC but has not received a reply.

The Hong Kong SFC has a mature monitoring system for market manipulation involving low buy and high sell actions. HK stocks implement investor identification codes, i.e., “real-name” system, and accounts of major shareholders and related parties can be traced. If a major shareholder “buys up” during the plunge caused by ex-dividend, and before the termination announcement, the transaction will be flagged as abnormal.

Therefore, the timing of major shareholders’ purchases and changes in shareholding ratios, and whether they align with insider information timelines, are key evidence.

Trading characteristics: Not consistent with core elements of market manipulation

Some also believe that the regulatory focus on stock price fluctuations lies in the completeness of information disclosure and compliance of trading behavior. Leechee International has previously fully disclosed the spin-off listing proposal, progress, and ex-dividend rules, and the information disclosure meets HKEX requirements.

Its trading features also do not meet the core elements of market manipulation, as the sharp decline on January 9 corresponds to the ex-dividend date, with the fluctuation matching the logic of ex-dividend value adjustment; the rebound on April 2 corresponds to the announcement of the spin-off suspension, and the stock’s reaction aligns highly with market expectations; both fluctuations show no abnormal trading data, and trading behavior conforms to normal HK stock market logic.