Red chip companies are theoretically companies registered in Cayman Islands or Bermuda, and Hong Kong laws only allow companies registered in these two offshore places to list in Hong Kong.
On the surface, the acquisition of red-chip listed companies by foreign investors is the acquisition of companies in Cayman Islands or Bermuda, which has no direct relationship with domestic companies.
China companies are under the jurisdiction of the CSRC, so if they are H-share companies, they are within the jurisdiction of the CSRC, while red chips are not.
Domestic investment under the jurisdiction of the Ministry of Commerce and the merger or reorganization of red-chip companies in China all fall within the scope of supervision of the Ministry of Commerce. However, it is only the change of shareholders of red-chip companies, which is not within the jurisdiction of the Ministry of Commerce.
However, it should be noted that if the ultimate controller of a red-chip company is a domestic person or a foreigner who has lived in China for a long time due to economic interests, and falls within the jurisdiction of Document No.37, he/she needs to register with the local foreign exchange administration department before he/she can quit the red-chip company.
In addition, in theory, if an overseas holding company transfers its rights and interests in China to overseas shares, it should register with the tax authorities where the domestic rights and interests are located and pay income tax according to Document No.698.