Ping An Insurance (Group), the mainland's second-biggest life insurer, has been forced to scale down its controversial share placement plan by 25 per cent due to its slumping stock price.
The company would raise 120 billion yuan instead of the originally planned 160 billion yuan, chairman Ma Mingzhe told fund managers during recent investment roadshows in Beijing and Shanghai.
Mainland investors are increasingly concerned huge share placements by some of the nation's biggest companies will flood the market, reducing the value of their holdings.
Shanghai Pudong Development Bank says it will cut the size of its new offering by 25 per cent to 30 billion yuan after its fund-raising plan sparked the biggest slump in its stock in six years earlier this week.
Ping An last month unveiled plans to raise 160 billion yuan by offering 1.2 billion shares and issuing 41.2 billion yuan of convertible bonds.
But the plan was given the cold shoulder by Beijing, which is concerned investors in the company would be burned. Ping An's shares have slid 26.16 per cent since January 18, when it announced the plan.
The People's Daily, the mouthpiece of the Communist Party, criticised the insurer, accusing it of taking advantage of regulatory loopholes to milk investors.