What’s New: Staff members of China’s leading investment bank, China International Capital Corp. (CICC), were accused by the country’s top securities regulator of flaws in handling a short-lived share sale plan for Lenovo Group.
The China Securities Regulatory Commission (CSRC) called in five employees of state-backed CICC’s investment banking department last week for a regulatory interview, criticizing them for inadequate due diligence in assessing Lenovo’s eligibility for the country’s tech-savvy STAR Market, the CSRC disclosed Wednesday.
The five summoned include CICC’s investment banking head Wang Sheng and four sponsor representatives.
The staffers mainly relied on documents provided by Lenovo to draw a conclusion that was inadequate and imprecise, the regulator said. This violated related rules on sponsorship, it said.
The background: Lenovo, the world’s No. 1 personal computer maker, in October abruptly withdrew a plan to sell stock on Shanghai’s STAR Market just days after its application was accepted by regulators.
The Hong Kong-traded company originally planned to list Chinese depositary receipts in Shanghai in hopes of raising 10 billion yuan ($1.55 billion) to fund new businesses in artificial intelligence and cloud services.
Lenovo’s Hong Kong traded stock plunged by the most in three years following the incident.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (hello@caixin.com)
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