In the latest crackdown of Chinese regulators on domestic tech giants, the plan of selling shares in its computer chip making unit by Chinese electric car maker BYD was forced to be suspended by the company.
A regulatory investigation into the law firm advising the company has forced the postponement of the public listing.
The company had made regulatory filings in May for a listing on Shenzen’s Nasdaq style market ChiNext.
This suspension is viewed as a part of the wider crackdown on the industry by Chinese authorities.
An investigation against Beijing Tian Yuan Law Firm, one of biggest legal services companies of China, had been started in relation to the listing, the Shenzen Stock Exchange said over the weekend.
China’s Security Regulatory Commissionwas investigatingthe law firm which previously had played the role of an advisor for BYD Semiconductor’s planned initial public offering (IPO), the exchange said without providing any further details.
BYD Semiconductor, the biggest maker of microcontroller chips for vehicles in China, had set a target of generating at least $421m ($309m) from the IPO. The company had then planned to invest the money back into the business to cope with the global shortage of semiconductors – especially those faced by the global auto industry.
All modern cars significantly depend on semiconductors to provide a range of features – ranging from seats and windows to steering and anti-lock brakes.
The direct rivals of BYD Semiconductor include big names such as Germany’s Infineon and Rohm Semiconductor in Japan. The firm’s parent company BYD is the largest car maker of China in terms of market valuation and counts the US investment veteran Warren Buffett as an investor.
With China tightening its regulations on everything from technology giants to insurance providers, BYD is the latest victim of the crackdown that has been forced to cancel its business major plans.
Additionally, measures to protect data privacy is to be introduced by China and a sweeping new privacy law was passed by the country’s top legislative body, the Standing Committee of the National People’s Congress, on Friday.
The aim of the new law, which is called the Personal Information Protection Law, is to impose strict controls on data collection by technology companies and is set to come into effect from November 1.
Issues of data privacy have plagued a number of technology companies in China in recent months.
The internet regulator of China, earlier this year, ordered online app stores to not offer for download the app of the Chinese ride-hailing firm Didi alleging that the company had personal data of its users in an illegal manner. That action was taken by the regulator just two days after the company’s debut at the New York Stock Exchange and the news of the regulatory action resulted in a drop in a sharp drop in the shares of the Chinese firm.
And in July this year, regulators banned the right of Chinese online tutoring companies to make a profit from teaching core subjects, resulting in shares of such firms nose diving. Stricter orders have also been passed by regulators on foreign investment in the industry.
(Adapted from Daily-Sun.com)