SenseTime postpones IPO in Hong Kong after US blacklist

Chinese artificial intelligence company SenseTime said it would postpone a $767 million initial public offering in Hong Kong after being placed on a US investment blacklist.

SenseTime said in a submission to the Hong Kong stock exchange on Monday that it would refund investors’ applications and issue a revised prospectus before completing the offering and listing. listing “soon”.

The delay of one of Hong Kong’s biggest listings in months came after the Chinese ride-hailing giant Didi announced it would delist from New York and move to Hong Kong a few months after the IPO.

“The global offering and listing will be postponed and the company is expected to publish an additional prospectus. . . along with the updated listing timetable,” SenseTime said.

USA on Friday added SenseTime blacklisted Chinese military-industrial complex companies, part of broader human rights punishment about people and entities with links to China, Myanmar, North Korea, and Bangladesh.

The Treasury Department has imposed investment restrictions on SenseTime, alleging that it has facilitated human rights abuses against Muslim Uighurs in China’s western Xinjiang province.

Washington’s action comes the same day SenseTime is expected to price its shares in Hong Kong ahead of its IPO, with the company seeking a valuation of up to $17 billion. Trading is scheduled to begin on December 17.

SenseTime said the US move pushed the company to withdraw its IPO “to protect the interests of the company’s potential investors by helping them consider the potential impact of such a latest development on their investment decisions.” “.

Wang Wenbin at China’s Foreign Ministry in Beijing said the US had “bad intentions” to hurt China by using the Xinjiang issue.

The US Department of Commerce in October 2019 placed SenseTime and other top Chinese AI champions, including Megvii, iFlytek and Yitu, on its list of organizations, accusing them of aiding “suppression” , mass arbitrary detention, and high-tech surveillance” of ethnic Uighurs.

Washington accused the company of developing facial recognition programs that could identify a target’s ethnicity, with a particular focus on identifying Uighurs. SenseTime has denied the allegations.

“We strongly oppose the designation and the allegation associated with it,” SenseTime said in a statement on Saturday in response to it being added to the blacklist. “We regret being caught up in the midst of geopolitical disputes.”

HSBC is the only Western investment bank participating in the proposed IPO. Others have avoided the suggestion after the US in 2019 placed SenseTime on another blacklist known as the Entity List. This restricts trade between US companies and those listed.

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