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Chinese social media platform Xiaohongshu said on Wednesday that current rumors regarding its initial public offering are not true after it was reported to have confidentially filed for an IPO by the end of June but faced obstacles due to a former employee's whistleblowing report regarding its "listing compliance."
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The company, also known as RedNote, reportedly seeks to be listed in Hong Kong as soon as the end of this year, with its valuation reaching US$31 billion (HK$242.95 billion) in a secondary-market transaction last September.
Its major investors hope its valuation will surpass US$70 billion, which could be the largest new listing in the city in recent years.
Last month, however, an individual called Chen Hao who identifies himself as a former staff member of the platform alleged that he filed real-name reports to multiple departments, including the Hong Kong Stock Exchange and Hong Kong Securities and Futures Commission, for the company's listing compliance issues.
He accused Xiaohongshu of compliance risks regarding variable interest entity structure disclosure, centralized layoffs before option exercises, and platform governance, supported by effective judicial rulings and supporting evidence from employees.
On July 7, Chen completed an online real-name report of the issue to the China Securities Regulatory Commission. Then he noted on Tuesday that he had submitted supplementary reports to HKEX and the Cyberspace Administration of China.
