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Shanghai stock exchange probes Zhejiang King after its public listing halt

Published 10/07/2023, 11:19 PM
Updated 10/07/2023, 11:20 PM
© Reuters. FILE PHOTO: A security guard stands at the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, February 3, 2020. REUTERS/Aly Song/File Photo

BEIJING (Reuters) - The Shanghai Stock Exchange said it will probe Zhejiang King Co Ltd after the Chinese maker of air conditioners halted its initial public offering (IPO) amid media reports about alleged issues such as the overpricing of shares.

The probe comes as China's securities regulators have tightened their scrutiny of IPOs and slowed the pace of share sales as part of efforts to revitalise a flagging stock market.

Zhejiang King on Saturday said it will suspend the new share subscription procedure initially scheduled on Monday because of the media reports, without specifying the nature of those reports.

In a statement issued late on Saturday in response to media inquiries about Zhejiang King's IPO that include allegations of overpricing of shares and that the company attempted to list the same assets twice, the Shanghai Stock Exchange said it is aware of the media allegations and that it will launch a targeted investigation into the firm.

Zhejiang King said in its prospectus published last month that assets related to its air conditioner business were indirectly acquired from a different listed air conditioner company via a series of asset restructuring schemes.

Zhejiang King said last month it aimed to raise 2.38 billion yuan ($325.98 million) at 68.07 yuan per share.

© Reuters. FILE PHOTO: A security guard stands at the Shanghai Stock Exchange building at the Pudong financial district in Shanghai, China, February 3, 2020. REUTERS/Aly Song/File Photo

The company priced its IPO at 51.29 times 2022 earnings, and its listed peers trade at 27.8 times earnings on average according to the China Securities Index Co, Zhejiang King said in the prospectus.

($1 = 7.3010 Chinese yuan renminbi)

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