China’s market regulator has blocked 42 IPOs in Shanghai and Shenzen. That happened after an investigation into an investment bank, a law firm and other parties involved in the transactions. The news of the halted IPOs was reported by Shanghai Securities News, which is part of state news agency Xinhua.
The blocking of the IPOs is part of a wider crackdown by Beijing against the private sector in China. For example, regulators also tightened controls on IPOs earlier this year, after companies sought to raise massive capital in the context of a rapid economic recovery.
China previously promised to monitor access to the capital market strictly. For example, according to the website of the Shenzen Stock Exchange, the sale of shares of the chip division of car and bus manufacturer BYD was halted.
China has been cracking down on all sorts of businesses lately, including companies in the real estate, gaming and private tutoring sectors. For example, companies have to comply with more rules to be able to offer loans. China also restricted IPOs in the United States. The government does this in favor of the socialist values of Chinese society.