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Hong Kong: AI firm Megvii reportedly faces additional queries from HKEx on IPO application after blacklisted by US over alleged involvement in human rights violations

“Chinese AI Giant Megvii Faces HKEX Queries on IPO Application”, 22 November 2019

Chinese artificial-intelligence giant Megvii Technology Ltd. is facing additional queries from the Hong Kong bourse ahead of its planned initial public offering, people familiar with the matter said.

Some questions relate to public complaints about whether the company adequately disclosed risks related to U.S. sanctions, the people said… Megvii…  will need to address the concerns before it receives formal clearance to go ahead with the share sale, the people said.

A recent online campaign has been encouraging people to send complaints to the listing committee and HKEX Chief Executive Officer Charles Li, lobbying the exchange not to approve Megvii’s listing application. A letter circulated online said Megvii breached the listing rules by failing to make adequate disclosures of sanction risks.

Megvii filed its IPO documents in August. The exchange’s queries aren’t necessarily an indication it will block the listing, and in some previous cases it has allowed a deal to go ahead after receiving a company’s explanations. A representative for Megvii declined to comment.

… The AI startup is among several Chinese companies that the Trump administration blacklisted over alleged involvement in human rights violations against Muslim minorities in China.

Megvii has said it “strongly objects” to the blacklisting and that the company complies with all regulations in the markets in which it operates…

[Also referred to Alibaba Group Holding Ltd., Ant Financial, Lenovo Group Ltd., China Mobile Ltd., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc.]

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