China suspends dozens of IPO plans amid underwriter and law firm probe


SHANGHAI, Jan 28 (Reuters) – China’s stock exchanges have halted processing at least 60 IPO applications as regulators probe intermediaries in the deals, including China’s Deutsche Bank securities firm.

Wednesday’s stock market disclosures showed that 12 IPO plans in Shanghai’s tech-heavy STAR Market and 48 in Shenzhen’s ChiNext Startup Market were put on hold.

Each had hired one or more of the three companies under investigation by securities regulators – Zhong De Securities Co, accounting firm SineWing and law firm King&Wood Mallesons – according to stock exchange filings. . Zhong De is a joint venture between Shanxi Securities and Deutsche Bank AG.

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The three companies served Leshi Internet Information and Technology, which the China Securities Regulatory Commission (CSRC) said last March committed accounting fraud between 2007 and 2016.

King&Wood Mallesons and Zhong De said they had no immediate comment. SineWing and Deutsche Bank could not immediately be reached for comment.

Shanxi Securities said in an exchange filing on Jan. 18 that Zhong De would cooperate fully with the CSRC’s investigation into alleged violations of the law when she underwrote sales for Leshi in 2016.

It was not immediately clear whether IPOs targeting the Beijing Stock Exchange were also affected.

China’s stock exchanges previously halted processing batches of IPO applications as regulators investigated intermediaries. Read more

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Reporting by Samuel Shen and Josh Horwitz; edited by Jane Wardell

Our standards: The Thomson Reuters Trust Principles.


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