China International Capital Corp and Huatai International have pulled out of a planned share placement with Hong Kong-listed AI chipmaker Black Sesame International Holding, following last week’s regulatory raids on Infini Capital Management, according to a report by Bloomberg.

Hong Kong authorities are investigating alleged insider trading and bribery, with reports suggesting Infini – the sole buyer in the HKD633.3m ($80.8m) placement – profited by roughly HKD315m via short positions and equity swaps following leaked placement information.

Despite the banks stepping back, Infini’s subscription agreement to acquire 33.5 million Black Sesame shares at HKD18.88 each remains “valid and binding,” according to the company. Completion of the purchase depends on regulatory approvals and stock exchange clearance.

The placement was originally intended to fund Black Sesame’s research and development in AI chips and robotics, with the company viewing Infini as a potential strategic partner in AI, robotics, and autonomous driving.