Citic Securities slides after Shenzhen exchange investigates China’s biggest brokerage over IPO sponsor role
- The sell-off follows Shenzhen exchange’s statement that it would take action against Citic for failing to clarify issues regarding Liangang Optoelectronic’s IPO prospectus
- China Securities Regulatory Commission has increased market surveillance since Wu Qing, dubbed as ‘broker butcher’, took over as the new chief last month
Citic Securities tumbled by the most in 18 months after the Shenzhen Stock Exchange said it would conduct an on-site supervision of China’s biggest brokerage by market value for its role as IPO sponsor of Liangang Optoelectronic Technology.
Shares of the state-backed brokerage slumped 4.9 per cent to 19.50 yuan in Shanghai on Monday, its steepest since September 16, 2022. Its Hong Kong-traded stock lost 3.9 per cent to HK$13.18, its lowest close since November 4, 2022.
The sell-off came after the Shenzhen bourse said on Friday night that it would take action against Citic Securities for failing to fully clarify issues flagged by the exchange regarding the IPO prospectus of Liangang.
The exchange had initiated three rounds of inquiry into the company and IPO sponsor Citic Securities on issues ranging from corporate governance to internal financial control and accuracy of information disclosure.