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

Siemens Led JV Eyes Development of Industrial Scale Green Hydrogen in Europe

Siemens Energy and Air Liquide have announced plans to establish a joint venture to produce industrial scale green hydrogen electrolyzers in Europe. Governments and companies have been looking to reduce costs of green hydrogen production and make the sector competitive to reach their carbon emissions targets.

Ford Reaches Every Corner of the World to Secure Raw Materials

Ford’s efforts to secure raw materials resulted in a list of mining companies that cover every region in the world, from Argentinian lithium to Indonesian nickel. Ford’s agreements, including the ones with mining giants Rio Tinto and BHP, are the latest signs of how big automakers are rushing to secure more raw materials to prevent future shortages. One of Ford’s most consequential deals was the one that put iron at the forefront of the company’s electrification plans.

Microsoft Pulls the Plug on LinkedIn in China

Microsoft announced that it would terminate LinkedIn operations in China. LinkedIn had been the last US owned social media site that had been operating in the country. The decision came after China’s regulatory bodies have tightened their grip on tech industry this year. The site, starting later this year, will resume as “InJobs”, which will focus on jobs and not include sharing and posting options.

Stay informed

error: This content is protected !!