(Yicai) April 27 -- China’s securities watchdog has handed down the first punishment under the country’s three-year-old overseas listing rules, penalizing a Chinese business for going public in the United States without first completing mandatory filing procedures in the home country.

Zhongneng Liangke Agricultural Technology, a supplier of natural and healthy food products, was fined CNY3 million (USD414,000) by the China Securities and Regulatory Commission, the CSRC announced on April 24.

China’s overseas listing regime came into force in March 2023. The rules state that, for an initial public offering or secondary listing overseas, the issuer must file with the CSRC after submitting its application documents abroad. This obligation extends to both direct and indirect listings.

Zhongneng Liangke’s controller Liangke Technology Innovation Biology Hong Kong, previously known as China Food Investment, filed with the CSRC at the end of 2024 for an indirect listing on the Nasdaq Stock Market through a special purpose acquisition company, the watchdog said.

The CSRC requested supplementary materials from Liangke Technology on March 6, 2025, but the company failed to comply and completed the backdoor listing as CN Healthy Food Technology Group [NASDAQ: UCFI] on Oct. 1.

After discovering what happened, the CSRC immediately notified US regulators and the Nasdaq authorities. CN Healthy Food was then suspended from trading on the same day it listed.

In addition to the penalty imposed on Zhongneng Liangke, the CSRC also slapped fines of CNY1.5 million on Jiang Zhenjun, the person in charge of the filing, CNY500,000 (USD69,000) on Guangdong Xinyu Law Firm, the intermediary involved, and CNY200,000 on Li Huabin, the lawyer who provided the legal opinion.

The CSRC said it will continue to balance opening-up and risk control, support Chinese firms in using both domestic and overseas markets and resources in a lawful and compliant way, toughen enforcement of overseas listings, enhance the standardization, normalization, and transparency of the filing system, and deepen cross-border cooperation with overseas watchdogs to maintain orderly markets and protect investors’ lawful rights and interests.

The CSRC also said on April 24 that DSC Holdings had completed regulatory filing for a Nasdaq listing. It was the first notice the CSRC had issued since last December confirming completion of the filing procedure for a US listing by a Chinese business.

Editors: Tang Shihua, Futura Costaglione