China Bans VIEs in Another Drawback for Tech Companies

China plans to ban companies from going public in foreign stock exchanges through variable interest entities (VIEs). The loophole was long used by Chinese tech companies to attract foreign investors.

The ban is among a number of changes made in a proposal of China’s overseas listing rules, which may be finalized this month. Officials said the ban is intended to address concerns over data security.

Companies currently using the VIE structure will be allowed IPOs in Hong Kong if they get necessary regulatory approval. They will need to make adjustments in ownership structures to make them more transparent in regulatory reviews.

It’s unclear whether the adjustments mean a reshuffle of shareholders or delisting the “sensitive” firms. Both moves will renew fears of a decoupling between China and the U.S. in areas like technology. The proposal is still being discussed and the rules may change.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Get your daily Business Brief

Subscribe free to Business Brief

Business Brief delivers the latest insights straight to your inbox

You'll get daily industry insights on

Energy, Cleantech, Oil & Gas, Mining, Defense, Aviation, Construction, Transportation, Online Retail, Bigtech, Finance and Politics of Business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

European Gas Prices Soaring Again as Yamal Pipeline Deliveries Incredibly Low

European natural gas prices rose more than 8% on Monday, nearing yet again an all time high, as Russia’s gas deliveries from the Yamal-Europe pipeline saw incredibly low levels. The surging gas prices in Europe has caused power prices to soar and triggered some British power suppliers to collapse.  

Exxon Set to Transfer Its 30% Stake in Russia’s Sakhalin-1

U.S. oil major Exxon Mobil is set to transfer its 30% stake in Russian oil development project of Sakhalin-1. Hundreds of companies, including energy giants Shell and BP, have exited Russia or transferred assets in the wake of Moscow’s invasion of Ukraine. Exxon, which was the operator of Sakhalin-1, did not reveal the other party in its U.S. Securities and Exchange Commission filing. The company produced 220,000 barrels of oil and gas per day from the field as recently as 2021. 

Taiwan’s Semiconductors: More Than a Business

As the world anxiously waits if China will launch an attack on Taiwan, the island has developed an unusual defense against the world’s second largest economy: Its semiconductor sector. The island’s semiconductor manufacturing business has become so advanced that it is indispensable for both the United States and China. 

Stay informed

error: This content is protected !!