US sanctions force Chinese company SenseTime AI to postpone IPO Business and Economy News

The US has been fined for allegedly creating a face recognition software used to oppress Muslim Uighurs.

SenseTime Group, China’s artificial intelligence startup, has delayed Hong Kong’s initial public offering (IPO) by $ 767 million after it was blacklisted for US investment.

SenseTime said it remains committed to completing the offer and will publish an additional brochure and an updated list calendar.

Reuters reported earlier on Monday that the company would withdraw its offer and update its prospectus to include the potential impact of the U.S. investment ban, with the goal of restarting the IPO process.

SenseTim projected the sale of HK $ 3.85 billion ($ 0.49) and HK $ 3.99 ($ ​​0.51) shares in a price range, according to its regulatory filings. That would bring in $ 767 million, down from $ 2 billion at the beginning of the year. Shares were expected to begin trading on December 17th.

However, instead of setting a quotation price on Friday, it was found that it was in urgent talks with the Hong Kong Stock Exchange and its lawyers about urgent reports on the future of the blacklist.

The delay was punished by the U.S. Treasury Department on Friday for punishing the role of creating face recognition software used in the oppression of Uighur Muslims in the western Xinjiang region of China.

When bankers were measuring investor interest in the IPO, news of a plan by the Treasury Department to add it to the list of Chinese military-industrial complex companies was reported on Human Rights Day and SenseTime forecast prices.

SenseTime did not provide details on the timing of a revised IPO when it was unveiled on the Hong Kong Stock Exchange on Monday.

“The company remains committed to completing the global offering and listing soon,” he said in the archive.

Chinese camps

A source said the company was trying to move quickly after January 9 to avoid a regulatory requirement to fully comply with the IPO when the current prospectus financial numbers should be updated. The company seized about $ 450 million from key investors and most of them could expect to stay in the deal, the source added.

The company said it would return the full application money, without interest, to all applicants who subscribed to its shares in the bidding process.

More than one million people, mostly Uyghurs and members of other Muslim minorities, have been arrested by UN experts and rights groups in recent years in a large camp system in China’s remote Xinjiang region.

Some foreign lawmakers and parliaments, as well as U.S. Secretaries of State for the Biden and Trump administrations, have called the Uyghur treatment a genocide, citing evidence of forced sterilizations and deaths in the camps. China denies these claims and says the growth rate of the Uyghur population is above the state average.

SenseTime said in a statement on Saturday that it was “reluctant to oppose the allegations and allegations made in connection with it”, saying the allegations were “baseless”.

Weak markets

SenseTime would be one of the biggest deals in the third quarter of Hong Kong, and its delay adds to the ongoing vulnerability in the city’s IPO market.

China Tourism Group rejected its plan to raise about $ 5 billion on its second list earlier in December, citing uncertain financial market conditions.

SenseTime’s IPO was HSBC’s largest listing this year, with a joint sponsor with China International Capital Corporation (CICC) and Haitong International.