CSRC Rejects Ningbo QL Electronics IPO Application

飞雪寒冰

The China Securities Regulatory Commission said on April 3 that it rejected the IPO application of Ningbo QL Electronics Co, which won approval to list last year, only to have its authorization withdrawn days before its shares were scheduled to trade.



The CSRC did not give a reason for rejecting the company’s application in a statement published on its website. Ningbo QL said in a statement filed with the Shenzhen Stock Exchange that it will pay back the 556.2 million yuan in IPO proceeds and 7.2 million yuan in interest to investors.



The ruling indicates that the current freeze on IPO approvals remains in force, and confirms a CSRC official’s remarks to the official Shanghai Securities News that the review “has nothing to do with the general resumption of IPOs.”



The announcement that the CSRC would revisit the Ningbo QL case had triggered speculation of a new wave of share issues. The benchmark Shanghai Composite Index opened down 1.87 percent at 2,313.88 points on March 31 after the CSRC announcement. China has not approved any IPOs since September 2008.

飞雪寒冰

Chinese investors are especially sensitive to large numbers of shares coming onto the market, which helped depress the Shanghai Composite Index for much of 2008, before the late-year collapse in global economies.



Ningbo QL, one of China’s biggest producers of single crystal silicon ingots, used in electronics manufacturing, won approval on March 5, 2008 to list on the Shenzhen Stock Exchange. It completed the subscription process for 26 million shares in June that year.



The CSRC suspended the IPO just one day before the shares were to debut after the China Securities Journal reported that Ningbo QL management may have used illegal asset transfer methods to prepare for the listing.

The Shanghai Composite Index was up 0.61 percent at 11:00 a.m. on April 7