Hong Kong billionaire Richard Lee’s FWD Group Holdings Ltd has relocated to New York to withdraw its multi-billion dollar initial public offering, the company said, amid rising tensions between China and the US.
The company, which is the insurance business of Mr. Lee’s Pacific Century Group, is considering other options, it said in a filing on Monday. It asked the US Securities and Exchange Commission to approve the withdrawal of its registration details.
According to a person familiar with the matter, FWD is looking for a listing in Hong Kong, where the company has greater brand recognition among consumers and potential investors. The person said geopolitical tensions between Beijing and Washington and how they could affect market conditions were also considered in the decision to postpone the IPO.
The Wall Street Journal reported last week that FWD was cold on plans to list in the US.
FWD said last week that it was raising more than $1.4 billion from new and existing investors by issuing new shares to pay off debt. The fundraising company was valued at about $9 billion after the incorporation of the new money, and the proceeds will help the company deliver before it goes public, the Journal reports.
Financial discord between the US and China is mounting, with Chinese ride-hailing giant Didi Global Inc saying earlier this month that it plans to delist shares in the US and pursue listing in Hong Kong. In late 2020, then-President Donald Trump signed a law that bans trading of securities in foreign companies whose audit working papers cannot be inspected by US regulators for three consecutive years. This has triggered a countdown that will force many Chinese companies to leave US exchanges.
The Biden administration has blacklisted dozens of Chinese companies and research institutions that restrict access to US investments and technology for their alleged support for China’s military and widespread surveillance of predominantly Muslim ethnic groups. SenseTime Group Inc., a Chinese developer of facial recognition technology, briefly delayed its plans for an IPO of shares in Hong Kong after being placed on a US investment blacklist, before reneging on the deal this week.
This story has been published without modification to the text from a wire agency feed
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