Analysis of How Ganfeng Lithium's Insider Trading Case Impedes Its Subsidiary's IPO Progress

Based on the collected information, I will conduct a

of how Ganfeng Lithium’s insider trading case impedes its subsidiary’s IPO progress.

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In 2020, during negotiations on equity cooperation with Jiangte Motor (formerly *ST Jiangte), Ganfeng Lithium (002460.SZ) was suspected of insider trading crimes [1][2]. The specific illegal acts are as follows:

Time Node	Key Event
June 9, 2020	Jiangte Motor internally drafted the “Plan to Become Jiangte Motor’s Largest Shareholder”, marking the start of the insider information sensitive period
June 22, 2020	Ganfeng Lithium transferred RMB 30 million to the “Ganfeng Lithium” securities account
June 23 to July 2, 2020	Accumulated purchases of 15.6777 million shares of Jiangte Motor, using approximately RMB 26.4838 million
July 8 to 9, 2020	Sold all the aforementioned shares, realizing a profit of RMB 1.1053 million
January 2022	China Securities Regulatory Commission (CSRC) opened an investigation into Ganfeng Lithium
July 2024	Jiangxi Securities Regulatory Bureau issued an administrative penalty decision: confiscation of illegal gains of RMB 1.1053 million and a fine of RMB 3.3159 million; a warning and a fine of RMB 600,000 for Chairman Li Liangbin, and a warning and a fine of RMB 200,000 for then Secretary to the Board Ouyang Ming [3]
December 29, 2025	Yichun Municipal Public Security Bureau issued a “Notice of Transfer for Prosecution”, and the case was transferred to the procuratorate for review and prosecution, on suspicion of “unit crime of insider trading” [1][2]

This case has escalated from an administrative penalty to a criminal judicial procedure, marking that the accountability for Ganfeng Lithium’s illegal acts has risen from the administrative level to the criminal level [2]. According to the Criminal Law of China and relevant regulations of the Supreme People’s Procuratorate and the Ministry of Public Security, illegal gains from insider trading of RMB 500,000 or more meet the standard for criminal case filing and prosecution. Ganfeng Lithium’s profit of RMB 1.1053 million has exceeded this threshold.

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Jiangxi Ganfeng Lithium Battery Technology Co., Ltd., founded in 2011, is the core subsidiary of Ganfeng Lithium in the power battery and energy storage battery sectors, undertaking the important mission of the company to connect the closed-loop industrial chain of lithium battery manufacturing and recycling [2].

To promote the spin-off IPO, in

, Ganfeng Lithium, together with an employee stock ownership platform and 11 external investors, injected nearly RMB 2.7 billion into Ganfeng Lithium Battery [2][3]. The investment agreement includes strict :

If Ganfeng Lithium Battery fails to achieve a

qualified IPO by December 31, 2025

, or fails to meet the spin-off IPO conditions due to laws, regulations and regulatory policies such as listing rules, and it is expected that a qualified IPO cannot be achieved by December 31, 2025, any investor shareholder shall have the unrestricted right to require the actual controller to repurchase the shares [2][3].

Major investors include well-known institutions such as Xiaomi Changjiang Industry Fund, Dongfeng Motor, Changan Automobile, GoodWe, Anker Innovations, Jimu Venture Capital, GooReach Acoustics, and Xinzhifeng Investment [2].

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According to the

:

If a listed company or its controlling shareholder or actual controller has received an administrative penalty from the CSRC within the most recent 36 months, it shall not spin off its subsidiary for listing

[2][3].

Ganfeng Lithium received an administrative penalty in

, which means:

• Ganfeng Lithium Battery cannot initiate the spin-off IPO process before July 2027
• The original IPO target by the end of 2025
  has essentially become unachievable
• The VAM clauses have been triggered, and investors have the right to require share repurchase [2]

Although the transfer of the case to the procuratorate for review and prosecution does not mean that prosecution is inevitable, it means:

• The company and directly responsible senior personnel may face criminal liability
• Even if prosecution is not pursued in the end, the case itself has had a substantial impact on capital market confidence
• The stock price fell by
  4.74%
  on December 29, 2025, the day the announcement was made, and continued to face pressure in the following two days [2]

Facing the risk of VAM failure, Ganfeng Lithium initiated a share repurchase in

:

Repurchase Item	Details
Total Repurchase Amount	RMB 1.6 billion
Repurchased Shares	499 million shares of Ganfeng Lithium Battery
Involved Shareholders	28 shareholders
Withdrawal Status	23 of them fully exited, including well-known institutions such as Xiaomi Industrial Investment, GoodWe, and Anker Innovations [2]

Although this repurchase was nominally for “meeting the long-term development needs of Ganfeng Lithium Battery and facilitating subsequent capital operations”, it is essentially a passive measure to deal with the blocked IPO.

Ganfeng Lithium itself is also facing severe financial challenges:

Financial Indicator	Data
2024 Net Profit Attributable to Shareholders	-RMB 2.074 billion (first annual loss since listing over a decade ago)
Total Liabilities in the First Three Quarters of 2025	Over RMB 63.4 billion
Asset-Liability Ratio	Approximately 57.59%
Short-Term Borrowings	RMB 10.577 billion
Cash and Cash Equivalents	RMB 8.017 billion [2]

The parent company’s capital pressure directly limits its ability to support Ganfeng Lithium Battery, affecting the subsidiary’s layout in key technology tracks such as solid-state batteries [2].

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1. IPO Timeline Fully Invalid
   : The original IPO target by the end of 2025 cannot be achieved due to the 36-month penalty ban period
2. Loss of Investor Trust
   : Multiple well-known institutions have chosen to exit, casting doubt on the company’s capital operation capabilities
3. Persistent Regulatory Compliance Risks
   : The outcome of the criminal case remains uncertain, which may lead to further penalties

1. Blocked Industrial Chain Layout
   : Ganfeng Lithium Battery undertakes the strategic mission of connecting the closed-loop industrial chain of lithium battery manufacturing and recycling, and the shelved IPO affects capital raising and business expansion
2. Competition in the Solid-State Battery Track
   : During the critical period of industrialization of next-generation battery technology, the parent company’s dilemma may limit its investment capacity
3. Superimposed Industry Cycle
   : The lithium battery industry is in a period of adjustment, and the insider trading case has exacerbated the compound pressure faced by the company

1. Wait for the Ban Period to Expire
   : The spin-off IPO plan can be restarted only after July 2027
2. Introduce Strategic Investors
   : Alleviate capital pressure through equity financing
3. Spin Off Non-Core Assets
   : In October 2025, it transferred 44.24% equity of energy storage business platform “Shenzhen Yichu” to recover RMB 664 million

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[1] China Economic Net - “Ganfeng Lithium Transferred for Prosecution, Clouds Hover Over Subsidiary’s Spin-Off IPO” (http://finance.ce.cn/stock/gsgdbd/202601/t20260102_2679208.shtml)

[2] 36Kr - “Nature of 5-Year-Old Old Case Changes, Ganfeng Lithium Is in Trouble This Time” (https://m.36kr.com/p/3627764541682182)

[3] Yicai Global - “Involved in Unit Crime of Insider Trading! Ganfeng Lithium Transferred for Prosecution, Subsidiary’s Spin-Off IPO Blocked” (https://www.yicai.com/news/102980353.html)

[4] 36Kr - “From ‘Lithium King’ to ‘Involved Party’: Ganfeng Lithium’s Insider Trading Dilemma” (https://m.36kr.com/p/3626398390993927)