China halts more than 20 IPOs sponsored by China Merchants Securities amid probe

China halts more than 20 IPOs sponsored by China Merchants Securities amid probe
FILE PHOTO: A man wearing a mask walks by the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, February 3, 2020. REUTERS/Aly Song/File Photo

SHANGHAI : Chinese bourses have halted processing more than 20 initial public offering (IPO) plans sponsored by China Merchants Securities, following an investigation into the broker, according to exchange disclosures.

The Shenzhen Stock Exchange has suspended 15 IPO plans set for its ChiNext board, while the Shanghai exchange has paused five IPOs targeting its tech-focused STAR Market since last Friday, exchange filings showed.

Three other IPOs targeting the Beijing Stock Exchange were also affected.

The bourses attributed the halts to an investigation by the China Securities Regulatory Commission (CSRC) into China Merchants Securities, their common sponsor.

The CSRC decided to file a case against China Merchants, as it failed to perform due diligence and was suspected of rule violations during a case in 2014, the broker said earlier this month.

The brokerage said it would cooperate fully with the CSRC.

China has vowed “zero tolerance” towards securities and accounting fraud, seeking to stabilise and reform its capital markets and channelling more money to fund innovation and economic growth.

STAR Market IPO candidates affected included Zhuhai Boya Technology Co., I-TEK OptoElectronics and Wuhan Dameng Database Co.

Impacted ChiNext listing hopefuls included Sidea Semiconductor Equipment (Shenzhen) Co., Guangzhou v-solution telecommunication technology co., and Shenzhen Q&D Circuits.

Chinese bourses have halted processing batches of IPO applications previously as regulators investigated intermediaries.


Source: Reuters