US investment giant J.P. Morgan Chase & Co. is in a spot of embarrassment after the Hong Kong stock exchange returned a Chinese company’s spinoff application.
It’s the first global investment bank to be named on a list of sponsors for deals in Hong Kong whose applications have turned away by regulators, the Wall Street Journal reports.
The public disclosure of returned listing applications, started in 2014, is part of an effort by the stock exchange to boost transparency and make investment-bank underwriters more accountable for listings.
The stock exchange returned an application by Shenhua Health Holdings Ltd., a small pharmaceutical arm of Hong Kong-listed Fufeng Group Ltd., for a spinoff on March 29, according to its website last updated in late April.
The application was sent back due to disclosure problems in the application, according to a person familiar with the situation, who didn’t provide further details. J.P. Morgan was the listing’s sponsor — the bank responsible for the company’s listing.
Shenhua Health has the option of refiling its listing application eight weeks after its first attempt.
The Hong Kong stock exchange has returned listing applications by a total of eight companies since it started disclosing such information in 2014.
Listings sponsored by BOCOM International (Asia) Ltd., China Everbright Capital Ltd. and Guotai Junan Capital Ltd. are among the deals whose applications the exchange returned over the past two years, according to the stock exchange’s website.
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