US Temporarily Not Allowing Chinese Companies IPO

0 23,672

The United States has temporarily banned IPOs from Chinese companies. However, the SEC wants first to investigate how to inform investors about the possibility that the Chinese government will take measures against the companies.

 

SEC chairman Gary Gensler called it crucial on Friday that Chinese companies provide more information before they can go public.

Didi was hit hard earlier this month after a US IPO. The Chinese taxi app made the IPO despite objections from the Chinese authorities. That was seen as a provocation, according to the Bloomberg news agency. As a result, regulators would consider possible penalties, including a fine or the cessation of certain company activities. Forced delisting from Wall Street would also be a possibility.

Earlier, the Chinese authorities also took measures against large tech companies such as Alibaba and Tencent to tackle their powerful market positions. Online retailer Alibaba was fined $2.8 billion.

Some Chinese companies cancelled their US IPOs earlier this month after Chinese authorities cracked down on Didi. For example, data services provider LinkDoc Technologies has cancelled an IPO, as has its bike-sharing app Hello.

Leave A Reply