BYD Semiconductor IPO plan halted due to probe into advisory law firm

Shanghai (Gasgoo)- Chinese automaker BYD's plan to list its semiconductor unit has been suspended due to a regulatory investigation into the adviser to the proposed initial public offering (IPO), according to Shenzhen Stock Exchange's ChiNext Market.

Beijing-based Tian Yuan Law Firm, who advises BYD Semiconductor on the IPO deal, is being investigated by China Securities Regulatory Commission (CSRC), according to an update dated August 18 on the website of the ChiNext Market.

The decision of the suspension was made in accordance with the article 64 of the Rules of the Shenzhen Stock Exchange for the Examination of the Offering and Listing of Stocks on the ChiNext. According to the Rules, Shenzhen Stock Exchange will halt review of a share-sale application if the issuer's sponsor, sponsor representative, securities service providers, or any of relevant signatories are under official investigation for any suspected violation of laws or regulations in IPO and listing, the offering of securities, the merger & acquisition and restructuring of a listed company, or any suspected violation of laws or regulations in any other businesses, which has a significant impact on the market, and the case has not been closed.  

According to the Rules, BYD Semiconductor can restore its listing qualification as long as its advisor gets rid of the aforesaid circumstance or finishes the due diligence within three months, and keep the Shenzhen Stock Exchange informed promptly.

BYD Semiconductor said it will promote Shenzhen Stock Exchange to resume the IPO review. Nevertheless, whether the law firm will be replaced or not has not been decided yet.

Shenzhen Stock Exchange accepted the IPO application for review in late June. According to the draft prospectus, BYD Semiconductor proposed to raise a fund of 2.7 billion yuan ($415.993 million) by issuing no more than 50 million shares. The proceeds would be used to supplement working capital and push ahead with the industrialization and update of new types of power semiconductor chips and the R&D and industrialization of power semiconductors and intelligent control units.