Short seller Blazing Research said Flying Mining - which was supposed to go public on October 31, but has suspended its initial public offering - is not suitable to debut, as the company recorded suspicious framework sales contracts.
In a report on its website, the short seller alleged that four of the five Flying Mining customers have revenues far less than their promised purchase amounts from the mainland marble mining and processing firm.
Blazing said the largest customer, Xiamen Hefeng, was just incorporated at the end of 2016. So its pledge to purchase a large amount of marble from Flying Mining shortly after incorporation was doubtful.
Neither Flying Mining chief executive Lin Hui or the company has responded to the allegations.
In other IPO action, three companies make their debuts today. Local gaming equipment firm, Asia Pioneer Entertainment Holdings, said its retail tranche was oversubscribed 12.9 times. Shares in the gray market closed at 50 HK cents, 78 percent higher than the offer price.
Listing candidate China-based Fineland Real Estate Services said its shares have been oversubscribed 22 times, and closed on gray market trading at 95 HK cents, 20 percent higher than the offer price.
Construction services contractor Shuang Yun Holdings' retail tranche was oversubscribed 15.19 times. Its shares closed at 79 HK cents in the gray market, up 41 percent from their offer price of 56 HK cents.
Shares of Tencent Holdings (0700)- backed Yixin Group, traded at HK$10.50 in the gray market yesterday, 36 percent higher than their reported IPO price of HK$7.70.
The Chinese automobile finance firm debuts tomorrow.