48 ChiNext IPOs Are Held Up as China Probes Intermediaries
An Zhuo
DATE:  Jan 27 2022
/ SOURCE:  Yicai
48 ChiNext IPOs Are Held Up as China Probes Intermediaries 48 ChiNext IPOs Are Held Up as China Probes Intermediaries

(Yicai Global) Jan. 27 – Forty-eight firms planning initial public offerings on Shenzhen’s Nasdaq-style ChiNext board have had to suspend the IPOs because three intermediaries in the deals are being investigated over fraud by Leshi Holdings, the Shenzhen Stock Exchange said.

The three agencies are Beijing King & Wood Mallesons, ShineWing Hong Kong, and Zhong De Securities, the bourse said in a statement.

Last April, China’s securities regulator revealed details of financial fraud by Beijing-based Leshi, once known as China’s Netflix, from 2007 to 2016.

In Leshi’s private placement in 2016, KWM served as attorneys, ShineWing as auditor, and Zhong De Securities as lead underwriter. The three are now facing lawsuits over their failure to spot the fraud, while Leshi is being sued by investors for CNY4.6 billion (USD725 million).

There have been two large-scale IPO suspensions in China since 2020 due to investigations into intermediary firms. At those times, companies either paused their IPO reviews until the probes were concluded, or opted to change agencies.

The 48 companies whose IPOs are held up this time can apply to continue with their existing reviews, but the timing of such applications is uncertain.

Editor: Tom Litting

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Keywords:   IPO,Leshi