Chinese artificial intelligence start-up SenseTime Group Inc (商湯科技) yesterday said that it would press ahead with its Hong Kong listing, a week after it was blacklisted by the US over accusations of human rights abuses in China’s Xinjiang region.
Earlier this month, its initial public offering (IPO) was pulled after the US Department of the Treasury announced new sanctions against the firm, saying that SenseTime’s facial recognition programs were designed in part to be used against Uighurs and other mostly Muslim minorities in Xinjiang.
Yesterday, the company filed a revised listing with the Hong Kong stock exchange, with trading expected to start on Thursday next week.
“Due to the dynamic and evolving nature of the relevant US regulations, we have required to exclude US investors,” the company wrote.
Bloomberg News reported that SenseTime had secured about US$512 million from nine cornerstone investors, including state-backed Mixed-Ownership Reform Fund and Shanghai Xuhui Capital Investment Co (上海徐匯資本投資).
The company is still planning to hit the pre-blacklisting US$767 million target with 1.5 billion shares at HK$3.85 to HK$3.99 per share.
Washington accuses SenseTime of being part of China’s “military-industrial complex” that provides technology for mass surveillance in Xinjiang.
It says that SenseTime has developed and deployed facial recognition software that can determine a person’s ethnicity, including whether someone looks like they have Uighur ethnicity.
SenseTime refuted the blacklisting, saying that the accusations were unfounded and emphasized that the company was “caught in the middle of geopolitical tensions.”
The US sanctions prevent individuals from obtaining visas to the US, block assets under US jurisdiction, and prevent targets from doing business with US individuals or entities — effectively locking companies out of the US banking system.
The blacklisting made it all but impossible for US investment banks usually involved in Hong Kong listings to get involved.
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