The chutzpah of Hong Kong small caps

There is no shortage of questionable manoeuvres in small-cap markets. Some are blunt. Some are opportunistic. Most are quickly forgotten.

What stands out are the more inventive ones—transactions which are properly disclosed, executed within the rules, supported by advisers and emerge from companies that were not obvious candidates for controversy. Yet they leave shareholders materially worse off.

One such case appeared in January 2026 while scanning company announcements in the days following the death of David Webb. After decades in which he kept a watchful eye on Hong Kong’s small-cap manoeuvres, it seemed worth checking what this looked like in practice.

Greatview Aseptic Packaging stood out because it was not a speculative shell. It had built a substantial international business and a credible operating track record. The company had grown across markets and established relationships with multinational customers.

But faced with a hostile takeover, it carved out a core operating business and parked it in a private equity-style fund. A general partner then assumed discretion over distributions and shareholders lost control of a crown jewel.

The move was painted as a protective measure to shield the business from board disruption and geopolitical tensions. Subsequent investigations suggest otherwise. The listed entity emerged much lighter, with the assets now likely to be deconsolidated. Legal battles are looming and Greatview faces the prospect of delisting after a long trading suspension.

The private equity carve-out was fully disclosed, structured within the rules and supported by professional advice. The auditor’s position was also disclosed. And the defining feature? No shareholder vote was required.

The episode had the familiar elements of means, motive and opportunity: a hostile takeover as the catalyst, a private-equity style fund as the mechanism, a rulebook built on thresholds and judgment that allowed it to proceed—and perhaps a little chutzpah.

Great expectations, interrupted

Greatview was a major supplier of liquid dairy packaging, counting Tetrapak as a competitor. The company had been on a strong financial trajectory, with profits in 2023 rising 33% year-on-year to RMB244.2m.

But in October 2023, its long-standing and largest single shareholder, JSH Ventures, a subsidiary of Jardine Strategic, cashed out. Around 28% of the company changed hands, with incoming shareholder Shandong Xinjufeng Technology Packaging, a major competitor listed on Shenzhen’s ChiNext market, determined to appoint new directors.

The Greatview board was unsettled by the move, warning shareholders it could disrupt customer relationships, and began to explore ways to separate its international operations from the listed group. It was cast as a “de-risking” strategy, citing customer concerns about management turnover and geopolitical tensions.

This culminated in a January 2024 decision to invest US$72m for a 90% stake in a newly formed fund, Future Strategy Investment Fund Limited Partnership. The remaining 10% was subscribed by Jiao Shuge, co-founder of CDH Investments, one of the PRC’s oldest and largest private equity funds, via a BVI entity for US$8m.

As part of the transaction, Greatview transferred 51% of its international business to the fund. These global operations were a key growth driver for Greatview, accounting for 43% of revenue in 2023, which rose 16.4% to RMB1.6 billion. Greatview was left with a minority 49% stake as operations transferred into the fund included those in Europe, America and Asia valued at RMB172m.

The fund was managed by Future Strategy GP, which took exclusive control of operations and investments. Despite owning 90% of the limited partnership, Greatview held only an indirect 30% stake in the general partner (GP) while Jiao Shuge controlled 60% through various entities. A shareholder agreement entitled Jiao to appoint most of the GP’s directors. The fund would pay the GP a 2% annual management fee and 20% carried interest.

Significantly, no shareholder approval was sought. Based on assets, profits, revenue and other percentage ratios, the company maintained the deal fell below the 25% “major transaction” threshold under Hong Kong’s Listing Rules—the point at which a shareholder vote is required—and treated it as a deemed disposal.

Accounting for control

In what would later become a key flashpoint, the company made clear that the general partner controlled the fund. Yet the company continued to consolidate the carved-out business in its accounts, with the caveat that it would “evaluate the facts and circumstances, as they evolve” when determining future accounting treatment.

This presumably drew scrutiny from the Stock Exchange, as the company issued a further announcement outlining the auditor’s view. The company said control depended on a “preponderance of facts”, including its economic interest, management involvement and customer relationships—while noting that this assessment could change. Its auditor PwC did not believe there was enough evidence at the time to remove the business from consolidation but would revisit the question in the 2024 audit.

PwC subsequently resigned as auditor in October 2024, without having started audit work for the year. Deloitte Touche Tohmatsu was appointed to fill the vacancy but was soon replaced by Grant Thornton. Greatview has yet to issue its audits for 2024 and 2025.

In the background, Shandong Xinjufeng had made a general offer for Greatview which completed in February 2025 and a newly constituted board soon turned its sights to the accounting treatment of the 2024 restructuring.

Two investigations were undertaken, and by January 2026 the findings pointed to former executives taking deliberate steps behind the scenes to exploit regulatory blind spots and avoid a shareholder vote.

Evidence suggests that key markets were carved out of the international business, and receivables were adjusted after the fact to keep size-test calculations below the 25% threshold that would have required shareholder approval.

No record of board approval for these market carve-outs could be found—and this has created uncertainty over the true scope of Greatview’s international business. Efforts to implement the carve-outs in practice have since encountered practical and commercial difficulties, including issues with invoices and collecting payments from customers in the affected markets.

Former directors and senior executives were also found to have undisclosed links with the fund’s general partner. These connections raise questions about whether the fund was truly independent and whether the deal should have been treated as a related-party transaction.

Loans and financial arrangements between the fund, the international business and parties tied to former management were meanwhile said to favour the fund’s controllers, lacked obvious commercial basis and further diluted Greatview’s economic position and influence.

The arrangements went beyond financing. Staff overseeing the international business were moved into the fund structure or related entities, taking operational control and institutional knowledge with them. This materially weakened Greatview’s oversight, and reduced its practical influence over the international business.

What remains

The upshot is that Greatview is tied to the fund economically, but structurally and operationally removed from it. Shareholders have effectively lost control of half the company’s international business, with warnings that future distributable income is uncertain.

Greatview has received one dividend of US$800,000 from the fund, paid on 13 January 2026. Meanwhile, in August 2025 it said the international operations in the fund were expected to be deconsolidated from the group’s financial statements. Greatview remains suspended from trading.

The company has instructed advisers to assess claims against former board members and professional advisers, and to examine the feasibility of unwinding the restructuring and fund subscription. It says it has made a report to police.

As of early March 2026, the company has taken initial legal steps. It also held an extraordinary general meeting in late February to get shareholder approval to remove Grant Thornton as auditors. They will be replaced by Rongcheng (Hong Kong) CPA.

The case may yet play out in the courts and the 2024 audit, if it comes, will shed more light on the ultimate financial impact on the company.

Until then, the episode suggests it does not take much determination to manoeuvre around the rulebook. The rationale was thin and the use of a private-equity style fund in this way was itself a red flag.

Yet in a disclosure-based system built on bright-line thresholds and professional judgment, careful structuring and a plausible rationale can still be enough. Where there is a will, the rulebook usually provides a way.

Copyright of Ninepin Limited, 2026