Investment bankers, who for years have been pitching for a mega stock market listing of the Postal Savings Bank of China (PSBC), are being forced to face reality: the deal may be put on ice for a long time.
PSBC, the seventh-largest lender on the mainland, had been expected to do an initial public offering of shares (IPO) through a listing in Hong Kong , or a dual listing in Hong Kong and Shanghai, as early as the first half of next year, raising the equivalent of several billion US dollars.
But the recent taking into custody of Tao Liming (pictured), the bank's president, and at least two of his colleagues at the institution and its parent company on suspicion of having committed economic crimes, has nixed the IPO plan, according to investment bankers who are tracking the potential deal.
The bank announced earlier this year that it had completed its internal restructuring and made itself a shareholding company, paving the way for the next widely expected step to become a listed company.
'We saw the news and we called them [officials at PSBC] ... and they told us it is not a good time to discuss anything, including the IPO case, before they get a new boss, when the whole story [about the scandal] can be much clearer,' said one Hong Kong investment banker who hopes to be involved in any potential deal.
'I think ... the entire IPO plan of the bank has been put on hold for now.'