China’s authorities decided to prohibit technological companies with a large database of user personal data to enter the IPO (primary public offering of shares) abroad, writes The Wall Street Journal with reference to sources. In recent days, the Chinese regulator of the stock market warned about the constraints of several companies and investors.
Restrictions are aimed at companies that for conducting an IPO abroad create divisions in other countries. Firms are created outside the China offshore company with a similar name, bring it to the IPO, and then translate the funds received. The so-called scheme of the “subject with a variable participation share” use IT giants Alibaba, Didi and Tencent, since the participation of foreigners in the capital of companies is limited in China.
The special concern of the authorities in political attitudes and in terms of security, industry related to the Internet, IT and Education. Spaces with less confidential users of users, such as pharmaceuticals, will receive access to foreign exchanges. The Chinese Commission for Regulatting the Securities Market continues to work on new rules and plans to introduce them in the fourth quarter of 2021.
In mid-August, Reuters reported that regulatory authorities plan to allow IT giants to go to the IPO in the United States, subject to the transfer of the database to the state. It was expected that new rules would take effect in September.
The pressure of the Chinese authorities forces the IT-company to look for ways to “draw” top management. At the end of August, the largest Internet platform of the country in the field of agriculture Pinduoduo promised to allocate $ 1.5 billion to help farmers and industry as a whole.