China’s Shenzhen Stock Exchange has suspended plans to list BYD Company’s automotive semiconductor unit after the government launched an investigation into the law firm that was providing advisory services on its initial public offering (IPO), according to local reports.
BYD Semiconductor, a leading Chinese manufacturer of automotive microcontroller chips, in May applied to list its shares on the Shenzhen ChiNext, a market controlled by the Shenzhen Stock Exchange. The IPO aimed to raise over CNY2.7bn (US$415m) to fund automotive chip development and production expansion, according to the prospectus.
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Reports suggest the listing was put on hold after China’s Security Regulatory Commission launched a regulatory probe into Beijing Tian Yuan Law Firm, a leading Chinese legal service provider that had previously advised on their IPOs of companies such as Bilibili and Nongfu Spring.
The Shenzhen Stock Exchange said in a statement on 18th August that it needed to suspend the IPO approval process of BYD Semiconductor due to the probe. Local reports suggest that more than ten other listing plans being advised by Beijing Tian Yuan have also been suspended, without providing further details.
BYD Company also controls BYD Automobile Company, a leading Chinese vehicle manufacturer backed by US investment heavyweight Warren Buffett.
The Chinese government over the last year has tightened its scrutiny of local technology companies, citing rising anti-trust concerns, and more recently said it has voiced concern over price fixing among local semiconductor traders.
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