![]() ![]() Accordingly, China Mobile, together with China Telecom and China Unicom, was de-listed in the US, giving Shanghai, when the company returned “home”, the biggest IPO in a decade with a raise of $7.8bn.Įurope largely kept out of the tussle between Washington and Beijing, only to find itself up against Russia. This sense of victimisation was heightened by the additional requirement for companies to prove that they have no links to a foreign government. Its Foreign Ministry complained that the rules were “clearly discriminatory against Chinese companies” and exemplified “wanton political suppression”. Chinese companies were always most likely to be affected by the regulation and the consequent risk of de-listing because of Beijing’s longstanding opposition to this oversight, claiming national security concerns. The Biden Administration adopted its predecessor’s Holding Foreign Companies Accountable Act, under which the SEC requires listed entities to have their audits examined by the Public Company Accounting Oversight Board (PCAOB).Īlthough the PCAOB’s own website states that it has been carrying out such inspections of non-US firms since 2005 (and specifically cites the 2002, post-Enron Sarbanes-Oxley Act as the basis for the regulation) the timing of its reinvigorated enforcement coincided with a worsening in relations between Washington and Beijing. The US added to the perception of shutters closing on a fully globalised IPO market with its own mirroring manoeuvres. In the example of Didi, commentators in China were quick to point out that Didi was part-owned by Japan’s SoftBank and (in a deal to get it to leave China) America’s Uber, although Didi strenuously denied any data transfer to foreign authorities. The Cybersecurity Administration declared it was protecting Chinese data from being “maliciously exploited by foreign governments”. As a consequence, 70 Hong Kong and Chinese firms were reported to have paused or shelved plans to go public in New York, most prominently LinkDoc Technology and ByteDance, the owner of TikTok. ![]() Regulators were now given an effective right of veto on overseas listings by way of a compulsory “safety assessment”. Chinese companies had routinely bypassed official foreign direct investment restrictions by floating in New York via offshore structures, known as the variable interest entity mechanism or VIE but this avenue appeared to be closed off. ![]() Periodic reassertions of central authority can be expected in China, but the 2021 regulations surprised the business community in their contrast to the previous encouragement of limited inward investment and the tolerance of overseas listings. The impact was primarily on the tech sector, whose stock values now fell by $1.5trn in the face of the public censure, changes to employment contracts and hefty fines. These laws were soon turned against other market-dominating enterprises accused of “disrupting the socialist market order”. ![]() The action nonetheless led to new subscriptions in China being blocked and an order to remove Didi from app stores, citing anti-trust laws and recently-passed cybersecurity legislation. It did so rather modestly, not mentioning the float on its Weibo channel and even declining the traditional invitation to ring the opening bell. Didi Global, the ride platform with a 90% market share in China, raised $4.4bn in its NYSE IPO in June 2021. Like many a dark drama, it began with a taxi journey gone wrong. However, only 4 of these 42 listed in the second half of the year because at the midpoint, the brakes went on. With a collective market cap of $1.4trn, there are now some 240 Chinese companies on NYSE and Nasdaq, of which 42 listed in New York in 2021 alone. The attraction is the unparalleled liquidity, tolerance of pre-profitability and open-mindedness to untested business models. A new exchange was even established in Beijing last November to manage the demand for new industries.ĭespite this, fast-growth Chinese companies have generally favoured New York when turning public, raising $76bn of IPO capital there in the last 10 years. Talk to our experts today to find out how EQ can help your businessīy 2020, Shanghai and Shenzhen exchanges had increased their combined market cap to $12trn on the back of strong domestic investor appetite, tech-friendly initiatives and a gradual opening up to foreign investment. Go to, the new home for EQ Credit Services, Riskfactor and KYC Providing innovative customer management solutions for the digital world Transforming the retirement and pensions markets with leading administration and technology solutions Providing share registration, governance and investor relations advisory and employee benefits to UK and US listed companies ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |