The US Securities and Exchange Commission (SEC) is investigating the US$3.4 billion listing of China Life Insurance Co (中國人壽), China's largest insurer, the Finan-cial Times said, citing unidentified people close to the regulatory agency.
In February, China's National Audit Office disclosed it had found accounting irregularities involving 5.4 billion yuan (US$654 million) at China Life, the country's biggest insurer, before it was restructured for its mid-December stock listing.
The New York-traded American depositary receipts fell 1.5 percent to US$25.01 on Wednesday, and the Hong Kong shares closed down 1.5 percent at HK$4.90.
Earlier this week, the company was hit by a class-action lawsuit by investors who complained that it failed to disclose that information before its shares were listed.
It's the first Chinese initial public offering to be probed by US regulators, the paper said. About US$15 billion in initial share sales scheduled by Chinese companies this year may be jeopardized if international investors lose their appetite for Chinese fundraisings, it said.
The spokeswoman at China Life's headquarters in Beijing, said that the company was aware of an "informal" SEC probe, but denied any wrongdoing.
"Everything we did is legal and in accordance with regulations," said the spokeswoman who would give only her surname, Li.
As for the lawsuit, she said, "We're confident we'll win."
China Life's IPO was among several last year that helped fuel investor interest in Chinese companies' shares. Demand for the insurer's shares exceeded supply by 25 times.
Hong Kong stock regulators refused comment yesterday on the report in the Financial Times, which said the territory's Securities & Futures Commission (SFC) also was investigating the company.
But an SFC spokesman said the commission planned to report results of an inquiry into a misallocation of China Life's shares ahead of its listing.
A day before the shares began trading in Hong Kong, it was discovered that a 37-page newspaper notice informing investors of their share allocations incorrectly listed the number of shares retail investors as having bought 3,000 shares when they only had obtained 2,000. Citigroup, one of the insurer's sponsors, said typesetting errors were to blame.
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