China has stepped up scrutiny of major overseas listings after a controversial New York IPO by ride-hailing giant Didi Chuxing went ahead this year, despite regulatory concerns at home.
In the latest measure to increase oversight, authorities said Monday that companies in industries where foreign investment is banned – due to a “negative list” – will have to seek approval from authorities for an overseas debut.
Overseas investors’ total ownership will be capped at 30 percent while a single investor should hold no more than 10 percent, according to the updated list of restrictions on foreign ownership taking effect from January.
Foreign investors are also “not allowed to participate in the operations and management” of the company, a joint statement by the Commerce Ministry and National Development and Reform Commission said.
It came days after authorities proposed that companies seeking foreign IPOs would need to register with the securities regulator.
The listing will be blocked if it could be considered to constitute a threat to national security.
Regulators also earlier suggested that companies with at least a million users undergo a cybersecurity review before going public abroad. (AFP)