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Charles Li Xiaojia, former CEO of Hong Kong Exchanges and Clearing (HKEX), has suspended the initial public offering (IPO) plan of his investment company Micro Connect International Finance (MCIF), according to a letter sent to shareholders.
“This decision stems from our recent recognition that the extended timeline associated with a proposed public listing has begun to outweigh its anticipated benefits, causing delays to MCIF’s deployment schedule and impacting Micro Connect‘s broader progress,” Li said in the letter dated December 18, the day the application lapsed.
Li, who had spearheaded multiple listing reforms and the connect schemes during his 11-year tenure at the HKEX, has not yet managed to advance the listing of MCIF, which he co-founded. He filed on June 18 to list the company under HKEX’s Chapter 21 regime – a framework designed for newly established investment companies seeking capital from institutional investors.
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The application expired on December 18 after the company failed to complete the listing within a six-month window.
Li said he would now operate MCIF as a private fund and raise capital from the private sector. Micro Connect Group, the fund manager for MCIF and which he also co-founded, would commit US$100 million and seek additional funding from other investors.
“Recent conversations with potential limited partners and investment targets have reinforced strong demand for MCIF on both the funding and financing sides,” he said. “To prioritise speed and execution, we will now operate MCIF as a private fund in the near term. This approach offers greater flexibility in both fundraising and deployment, faster time to market, and access to a wider pool of global institutional investors.”
No company has successfully listed through Chapter 21, raising calls for HKEX to review the regime. Photo: Sun Yeung alt=No company has successfully listed through Chapter 21, raising calls for HKEX to review the regime. Photo: Sun Yeung>
Li added he remained “open to a potential listing” of MCIF as an investment company. “Our plan to list Micro Connect Group in the foreseeable future remains unchanged,” he said.
Li, 64, stepped down as CEO of HKEX in 2021. After his departure, he and Gary Zhang launched Micro Connect, which has rolled out several projects, including the Micro Connect Macau Financial Assets Exchange in 2023. The platform allows institutional investors to trade daily revenue obligations, earning returns from a share of small firms’ revenue in exchange for growth capital.
Since its establishment in 2021, Micro Connect has deployed over US$500 million to more than 13,000 businesses in mainland China, while building an investment network, Li said.
The next phase of Micro Connect’s development, starting in 2026, would focus on prototyping investment products and operating as “central kitchens” by creating standardised connections between cash flow-based assets and global institutional investors, he added.
MCIF’s listing bid under Chapter 21 rules highlights the challenges of the regime, which has been in place since 1989 for investment companies without operating businesses to raise funds for projects. Only 21 firms have taken this route, with China New Economy Fund the last to do so in January 2011, a year after Li took over HKEX’s reins.
HKEX may now need to review Chapter 21, given that no company had successfully listed using such a route for more than a decade, said Robert Lee Wai-wang, a lawmaker and the chairman of Hong Kong-based Grand Finance Group.
“Our family office listed a Chapter 21 company many years ago, while market participants are also interested in investing through this route, but there have been no new listings under such a route for a long time,” Lee said. “It may be time for HKEX to review the chapter to see what problems have prevented companies from listing via such a route, and to make improvements to the regime.”
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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