Chinese regulators have requested additional disclosure from Taihe Music Group regarding its offshore structure and round-trip investment compliance as the company advances its proposed Hong Kong listing, documents show.
On September 11, the China Securities Regulatory Commission (CSRC) published its latest batch of supplemental filing requirements for overseas listings, covering applications submitted between September 7 and September 11, 2026. In total, the regulator's international department asked nine companies to provide further information. Among them, Taihe Music was directed to clarify matters pertaining to the legality of its offshore corporate architecture and return investment arrangements.
According to a Hong Kong Stock Exchange filing dated June 22, Taihe Music Group submitted its listing application to the main board, with Deutsche Bank and China Securities International serving as joint sponsors.
The CSRC has asked Taihe Music to address the following points, with legal counsel required to verify and issue explicit opinions on each matter.
First, regarding domestic operating entities: (1) The company must disclose the paid-in capital status of its domestic operating entities, including the pricing basis for all capital increases and equity transfers—with prices listed separately—whether contributions were actually made, and whether there are any instances of unmet capital contribution obligations, capital withdrawal, or defective funding methods. A definitive conclusion must be provided on the legality of each equity change. (2) It must also clarify whether the business scope and actual operations of its domestic entities involve sectors restricted or prohibited for foreign investment, along with supporting rationale, and whether the company will continue to comply with foreign investment access policies after the listing.
Second, concerning shareholders: (1) The CSRC wants to know whether any shareholding arrangements were held in trust or on behalf of others during the historical development of the issuer and its domestic operating entities. (2) Under the regulatory guidelines for overseas listings (Category No. 2), the company must conduct look-through verification on offshore entities above shareholders holding 5% or more, explaining whether any entities prohibited from holding shares under current laws exist.
Third, regarding the compliance of offshore structure and round-trip investment: (1) The company must detail the specific regulatory procedures undertaken—including foreign exchange administration, outbound investment, foreign investment, and tax management—in establishing the offshore structure and round-trip investment, and provide a conclusion as to whether these complied with effective regulations at the time. (2) It must also disclose the transaction consideration, pricing basis, payment methods, payment timelines, and fairness of pricing for its acquisition of domestic operating entities, as well as the tax filing status of transferors in those equity transfers, assessing compliance with the regulations governing mergers and acquisitions of domestic enterprises by foreign investors.
Fourth, concerning the equity incentive plan: (1) The company must provide a clear opinion on whether the plan was legally implemented and whether any benefits were improperly transferred. (2) It must explain the fairness of the grant pricing, and whether former employees retaining incentive shares after departure is consistent with prior agreements, along with any disputes or potential disputes. (3) The company must provide the plan's charter or agreements, details on specific participants, their positions and benefit entitlements, the reasons for adopting a trust structure, and the main terms of related trust contracts—including but not limited to the trust method, management authority, fees, contract duration, conditions for modification or termination, asset disposal arrangements, contract execution dates, and other special provisions. (4) It must also describe the basic details of the trusts and domestic entities in accordance with the Category No. 2 guidelines.
Fifth, the company must explain the specifics of repeated administrative penalties imposed on Chengdu Taihe by the Chengdu Municipal Bureau of Culture, Radio, Television and Tourism, and what corrective actions were taken, assessing whether these penalties materially affect the proposed listing or constitute significant violations of law. A simultaneous review is required to determine whether other domestic operating entities might face similar issues.
Sixth, in line with the Category No. 2 guidelines, the company must disclose the nationalities of its directors, senior management, and beneficiaries identified through look-through analysis, including whether they hold any other permanent overseas residency rights.
Seventh, the CSRC asks whether this Hong Kong listing constitutes a spin-off of a subsidiary from companies already listed on Nasdaq or the Hong Kong Stock Exchange for independent listing on another overseas market. (1) If it is a spin-off, the company should explain the rationale, necessity, and feasibility of the arrangement. (2) It must also demonstrate independence between the listed parent and the subsidiary in terms of assets, finances, and personnel, confirm the parent's ability to maintain independence and operational sustainability post-spin-off, and verify whether the new entity has adequate governance capabilities.
According to the prospectus, citing Frost & Sullivan data, the company ranked as a global leader in the independent Mandarin music content and services industry by 2025 revenue. It also positions itself as a pioneer in integrating the full music industry chain, offering comprehensive one-stop music content and services to creators and industry participants.