Bank of Jinzhou Co (錦州銀行) delayed its US$600 million initial public offering (IPO) in Hong Kong as the stock exchange asked for information on the lender’s ties to a company that is under investigation by regulators.
The bourse last week requested more information on items including some litigation proceedings and on the Chinese bank’s links to Hanergy Thin Film Power Group Ltd (漢能薄膜發電集團), board secretary Wang Jing (王晶) said by telephone yesterday. The exchange’s initial feedback was positive after the bank addressed the queries, he said, without elaborating.
The lender has sold wealth management products that invested in Hanergy’s debt, according to documents seen by Bloomberg. Hong Kong’s Securities and Futures Commission (SFC) on May 28 said it was investigating Hanergy, whose shares have been suspended after a 47 percent tumble on May 20.
The SFC has declined to speak about the specifics of its probe, while Hanergy, which makes equipment used to manufacture solar panels, has not issued any statements detailing the reasons for the stock suspension.
Bank of Jinzhou, based in the city of Jinzhou in northeastern Liaoning Province, hopes to conduct the hearing for its IPO with Hong Kong’s exchange late next month, as it cannot be completed this month, Wang said. It is expected to take several weeks to audit the bank’s first-half financial reports, he said.
The lender was founded in 1998 and has branches in 12 cities across northern and northeastern China, according to its Web site. It had 250.7 billion yuan (US$40.4 billion) of assets as of Dec. 31 last year, according to its annual report.
Reuters reported earlier that the lender’s IPO was delayed because of its link to Hanergy’s parent company. Bank of Jinzhou was seeking about US$600 million from the sale, people with knowledge of the matter said in January. The company has not publicly announced a fund-raising target.
China’s more than 110 city commercial banks are seeking to replenish capital to expand beyond their home bases and compete with larger, better-funded rivals. The China Banking Regulatory Commission in January said it would form a separate unit to supervise these lenders, which controlled 13 percent of the nation’s US$21 trillion of banking assets at the end of September last year.
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