What’s new: China’s cyberspace watchdog has cast doubt on the authenticity of a document that emerged online this week suggesting the agency plans to force large internet firms to seek its approval before raising cash or going public.
“The Cyberspace Administration of China (CAC) has never released such a document. This is false information,” the agency said in a statement (link in Chinese) posted to its official WeChat account, which did not elaborate.
The document circulated on Wednesday as media reports emerged, citing sources, claiming that the CAC planned to issue new rules that would require tech companies with more than 100 million users or revenue in excess of 10 billion yuan ($1.57 billion) to seek its approval before receiving new investment or launching an IPO.
Background: The denial comes after the government stepped up scrutiny of domestic tech companies’ share sales. Earlier this month, the CAC and 12 other government agencies unveiled revamped rules that will usher in more stringent cybersecurity reviews for data-rich companies seeking foreign listings. The new regulation will go into effect on Feb. 15.
In November, the CAC proposed another draft rule that would mean data-rich Chinese firms listing Hong Kong would have to undertake a cybersecurity review as well.
These toughened-up measures came in the wake of Didi Global Inc.’s blockbuster U.S. listing in June 2021, after which the ride-hailing giant became the target of a national security investigation. Further investigations followed, probing other overseas-listed mainland firms, including Full Truck Alliance Co. Ltd. and online recruitment firm Kanzhun Ltd.
Read more Caixin Explains: What China’s New Cybersecurity Review Rules Mean for IPOs
Contact reporter Manyun Zou (manyunzou@caixin.com) and editors Joshua Dummer (joshuadummer@caixin.com) and Flynn Murphy (flynnmurphy@caixin.com)
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