China CSRC to study foreign-listed companies relisting on mainland
In an effort to avoid a repeat of last year’s stock market rout, the Chinese securities regulator said it is analyzing the potential impact of Chinese companies listed overseas returning to the mainland and relisting on the Chinese exchanges.
The valuation gap between the domestic and overseas market and speculation on shell companies should be paid attention to, Zhang Xiaojun, a spokesman for the China Securities Regulatory Commission (CSRC), said at a weekly briefing on Friday, according to remarks posted on CSRC’s official Weibo microblog, reported Reuters.
The CSRC is studying the potential impact of Chinese companies currently listed overseas delisting from the foreign exchanges and relisting on the mainland’s A-share market through initial public offerings (IPOs), mergers and acquisitions, as well as restructuring, Zhang said.
The regulator made the comments following rumors that it would block domestic listings by companies currently listed overseas, the Shanghai Securities News reported.
“For companies already in the process of relisting at home, the faster they get done the better because regulatory uncertainties are rising,” Reuters attributed to a banker, who declined to be identified. “We may also suggest that some clients opt for the new third board, given that there are fewer regulatory hurdles.”
Last summer’s rout was partly blamed on a flood of IPOs hitting the market.
Domestic media have reported at least 20 Chinese firms listed overseas are considering delisting to come back and relist in China, some of them via “back-door listings” or “reverse mergers” that involve injecting assets into an already listed firm, thus skipping the long approval queue for IPOs.