JD Technology’s IPO Delayed as Firm Waits on Regulators

JD Technology, the FinTech arm of Chinese eCommerce giant JD.com, is delaying its initial public offering as it continues to wait for government regulatory approval.

That’s according to a report Thursday (May 12) by Reuters, which said that JD Techology had applied for approval of its $2 billion IPO in January with the China Securities Regulatory Commission (CSRC), China’s securities regulator.

Sources close to the company told Reuters that JD had hoped to submit its initial filings to the Hong Kong Stock Exchange by the end of March, followed by the IPO later this year.

But the company still needs approval  from the CSRC, something required for a domestically incorporated company to list offshore, even in the Chinese-controlled territory of Hong Kong.

Learn more: China Regulators Tell Alibaba, Other U.S.-Traded Firms to Prep for Audit

JD.Com and JD Technology did not respond to emailed requests for comment, Reuters said. The CSRC told the news outlet it it supports qualified companies to “independently choose their listing venues” and conduct overseas listings that comply with regulations.

The regulator said it will conduct its review of JD Technology’s application for the IPO in accordance with laws and regulations, but declined to comment on the specific review situation.

However, one of the sources said the main regulatory concern about JD Technology’s planned IPO is connected to the firm’s consumer finance business. Reuters said this person asked not to be named due to confidentiality constraints.

See also: China Investigation Triggers Delay in 60+ IPOs

Earlier this year, PYMNTS reported that more than 60 IPOs across China were on hold as regulators looked into the law firms and underwriters behind them. The IPOs included 12 planned IPOs in Shanghai’s STAR Market and another 48 in Shenzhen’s startup cluster ChiNext.

Each of the 60 companies had hired one or more of three companies being investigated by securities regulators: Zhong De Securities Co., accountancy firm SineWing and law firm King&Wood Mallesons.