18 August 2019

China Tuna IPO freeze highlights risks in cross-border trading

Investors could face unexpected risks in the upcoming cross-border stock trading and should exercise caution, the Hong Kong Economic Journal reported Friday.

The report followed its own exclusive about a delay in the planned initial public offering (IPO) in Hong Kong of China Tuna Industry Group on orders of China’s agriculture authorities.

The scheme, which allows stock trading between the Hong Kong and Shanghai stock exchanges, is expected to begin any time soon.   

The proposed US$150 million IPO ws suspended after the environmental group Greenpeace alerted the Hong Kong stock exchange to anomalies in China’s Tuna’s listing documents.

It said certain key information had gone missing and in some cases, the company had given outdated data, according to the report.

China’s agriculture ministry confirmed the claims after its own investigation.

The incident shows investors could be exposed to unexpected risks when even the Hong Kong stock exchange, with its stringent listing rules, appears to have missed the discrepancies, the report said.

They face greater risks when investing in Shanghai given its looser regulatory regime.

For instance, the standard of oversight for Shanghai-listed A shares is not the same in Hong Kong and Shanghai, it said.   

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