SHANGHAI/HONG KONG - Chinese regulators are scrutinising old business deals and even the personal bank accounts of senior executives as they ramp up inspections of IPO hopefuls to slow the pace of fresh capital raisings and boost secondary markets, according to 10 sources.
The sources, who have knowledge of the matter, declined to be named due to the sensitivity of the matter. The CSRC did not respond to requests from Reuters for comment. While China's domestic benchmark market index has risen 7% this year after bottoming in February, total funds raised via IPOs in mainland China plunged nearly 90% to $2.6 billion for the first four months of the year, the lowest since 2013, according to LSEG data. Excluding mainland China, global IPO volumes jumped 84% to $32.4 billion over the same period.
Wu, who was nicknamed the "broker butcher" for a crackdown on securities firms in a previous regulatory stint, said in March "every step of the IPO vetting and registration process should be put under the microscope", and vowed to "keep fraudsters away from capital markets." When inspectors arrive, bankers sometimes need to hand over their mobile phones and laptops because if they refuse, they could be kicked out of the IPO project or even fired, said a banker who works at a major Chinese brokerage.