The China Securities Regulatory Commission (CSRC) has ordered three companies seeking initial public offerings (IPOs) in Hong Kong to provide additional documentation regarding tax compliance and capital movements.
The CSRC told Fujian Senda Electric, a company based in Fuzhou, Fujian province, that it must disclose details on internal dividend approvals, dividend fund flows, and compliance with tax and other regulatory procedures. The company, which trades on Beijing’s National Equities Exchange and Quotations board, has a history involving a Hong Kong trading firm and several restructurings, including a conversion from a foreign-invested enterprise to a domestic enterprise.
In a statement issued last week concerning supplementary filing requirements for overseas IPOs, the CSRC asked Fujian Senda to confirm if all previous capital increases and equity transfers were lawful and compliant. The regulator also required the company to detail the completion of foreign-investment filing, foreign exchange registration, tax payments, and other relevant procedures.
The CSRC also requested that Shenzhen Pu Ying Innovation Technology Corp, a manufacturer of enterprise-grade financial intelligent printing and document processing equipment, explain the rationale behind its previous capital reductions. The regulator asked the company to confirm whether all required legal and tax procedures were completed and requested details on internal dividend decision-making and distribution during the reporting period, along with tax payments and other procedural compliance.
Separately, the CSRC has asked Amicro Technology, a Zhuhai-based provider of chip technology for intelligent mobile robots, for further details. Although the company passed its listing hearing with Hong Kong Exchanges and Clearing, the CSRC requested information on the pricing basis for equity transfers involving new shareholders in the 12 months before the Hong Kong listing application. The regulator also requested the income tax payment status for those transactions.
These actions follow a period of tougher tax enforcement by Chinese regulators. According to Wind, a financial data provider, at least 80 listed Chinese firms were ordered to repay corporate income taxes and late payment surcharges to local authorities in the first half of this year. Most of those cases involved companies in the pharmaceuticals, new materials, chemicals, environmental protection, agriculture, and information technology sectors.
