IMAGE SOURCE GETTY IMAGESChinese electric car maker BYD’s plan to sell shares in its computer chip making unit has been suspended, the latest share offering to be hit by Beijing’s crackdown on businesses.
The listing has been put on hold due to a regulatory investigation into the law firm advising the company. The plan to list on Shenzen’s Nasdaq style market ChiNext was filed in May. The suspension comes amid a broader regulatory tightening on industry by Chinese authorities.
Over the weekend, the Shenzen Stock Exchange said Beijing Tian Yuan Law Firm, one of China’s biggest legal services companies, was being investigated in relation to the listing.
It said the firm, which has been an advisor for BYD Semiconductor’s planned initial public offering (IPO), was being investigated by China’s Security Regulatory Commission but gave no further details. BYD Semiconductor had aimed to raise at least $421m ($309m) from the sale of shares.
It planned to invest the money back into the business as global carmakers struggle with a shortage of computer chips. The firm is China’s biggest maker of microcontroller chips for vehicles.
Microcontrollers are vital components in modern cars, used for everything from seats and windows to steering and anti-lock brakes.
BYD Semiconductor competes directly with major chip makers including Germany’s Infineon and Rohm Semiconductor in Japan.
Parent company BYD is China’s biggest car maker by market valuation and is backed by US investment veteran Warren Buffett.
New privacy law
Beijing is introducing measures to protect data privacy, and on Friday, China’s top legislative body, the Standing Committee of the National People’s Congress, passed a sweeping new privacy law.
The Personal Information Protection Law aims to strictly control data collection by technology firms and will take effect from 1 November. A number of technology companies have faced problems in China with relation to data privacy.
Earlier this year, the country’s internet regulator ordered online stores not to offer Chinese ride-hailing firm Didi’s app, saying it illegally collected users’ personal data. It came just two days after the company’s New York Stock Exchange debut and its shares fell sharply on the news.
Ant, backed by Jack Ma, the billionaire founder of e-commerce platform Alibaba, was set to sell shares worth about $34.4bn. But that was suspended on account of competition concerns, with China forcing a sweeping restructure on the group. The listings in Shanghai and Hong Kong would have been the biggest stock market debut to date.
Source: bbc.com
