China’s regulator hits CICC with over US$1 million in penalties for chip company’s IPO

China’s market regulator has fined China International Capital Corporation (CICC), considered China’s Goldman Sachs, 6 million yuan (US$841,000) over its failure to perform due diligence as sponsor of local chip company S2C’s failed new share listing in 2021, according to the investment bank’s filing with the Hong Kong stock exchange.

The China Securities Regulatory Commission (CSRC) also confiscated 2 million yuan from the company’s sponsorship business income, and issued warnings and fines of 1.5 million yuan each to CICC executives Zhao Shanjun and Chen Liren, the sponsor representatives of the initial public offering (IPO).

CICC’s “failure to exercise due diligence” in its sponsorship of S2C’s IPO on the science and technology innovation board, along with “misrepresentations” in the issuance sponsorship letter and other documents it issued, violates the Securities Law of the People’s Republic of China and constitutes an illegal act, the CICC disclosure said.

“The company is committed to an investor-oriented approach, continuously enhancing the control of professional quality, rigorously safeguarding the ‘entrance’ to the capital market, fulfilling its responsibility as a ‘gatekeeper’, and better serving the high-quality development of the capital market,” it added.

CICC said its operations remain normal.