Companies in China Abandon Plans for IPOs over Tight Scrutiny

Companies have rushed to abandon their plans for initial public offerings (IPOs) in China this year due to the tightening of rules by the securities watchdog.

Data from stock exchanges revealed that 47 companies have withdrawn their listing plans from China’s stock exchanges thus far this year, compared to 29 withdrawals during the same period last year. The cancellations coincide with the China Securities Regulatory Commission’s (CSRC) efforts, led by new chairman Wu Qing, to enhance regulatory scrutiny and restore confidence in the market.

Under Wu Qing’s leadership, the CSRC has sought regulatory feedback from market participants, penalized a company for fraudulent listing, and implemented other measures as major indexes hover near five-year lows. In addition, a CSRC official announced on Friday that companies involved in accounting fraud will face severe penalties, and the watchdog will increase on-site inspections to ensure compliance with regulations.

Source: Reuters