- Angelina Jolie stunt double sues News Corp over hacking
- Kanye West wins over critics with 'daring' new album 'Yeezus'
- Shares choppy, dollar steady as Fed meets
- Massachusetts police search NFL player's home in homicide probe: report
- Journalist who brought down U.S. general is killed in Los Angeles car crash
China Auto Rental cancels $138 mln U.S. IPO
SHANGHAI May 24 (Reuters) - China Auto Rental has formally withdrawn its application to hold an initial public offering in the United States, marking an end to the first attempt by a Chinese firm to list in New York since U.S. regulators tightened rules for foreign applicants.
The company, which postponed a planned NASDAQ listing on April 24 citing "poor market conditions," disclosed its decision in a filing with the U.S. Securities and Exchange Commission (SEC).
It originally hoped to raise around $158.1 million to pay off debt and expand its fleet, before reducing the targeted sum to $138 million.
Yao Junhong, executive vice president of China Auto Rental, was quoted in Chinese business magazine Caixin saying the environment for Chinese stocks in the United States was not good at present, and he feared a weak IPO would damage the company's future ability to raise funds.
China Auto Rental, which says it owns 26,000 rental cars in China, could not be reached for comment at time of reporting.
The company is backed by Legend Holdings, parent of China-based private equity fund Hony Capital, and the owner of computer maker Lenovo among other businesses.
U.S-listed Chinese stocks saw their reputations tarnished over the last two years as dozens of Chinese companies listed in North America were accused of accounting irregularities or outright fraud.
Many prominent Chinese companies were forced to delist, including Longtop Financial Technologies, which saw over $1 billion worth of market capitalization wiped off the boards when it was forced to leave the New York Stock Exchange in August 2011 after its auditor Deloitte resigned, complaining of managerial misconduct during the course of the audit.
Sino-Forest Corp, along with some of its executives, was charged with fraud by Canadian regulators on Tuesday after being delisted from the Toronto Stock Exchange earlier this month.
U.S. and Chinese regulators continue to negotiate over how Chinese firms that propose to list in the United States are to be audited. A standout issue is the refusal of Deloitte's China subsidiary to release documents related to Longtop Financial to the SEC, citing state secrecy laws. Longtop claimed its primary clients were China's "Big Four" state-owned banks.
However, the main U.S. auditor watchdog told Reuters in early May that the U.S. Public Company Accounting Oversight Board (PCAOB) is close to an agreement that will allow it to observe audit inspections in China.
Jim Doty, chairman of the PCAOB, said the current proposal on the table is that U.S. inspectors be allowed to observe Chinese authorities when they inspect audits that are done in China of U.S.-listed companies.
But he added: "one can never guarantee the outcome of this."
- Tweet this
- Share this
- Digg this