Over half of initial public offering (IPO) applications made in the first five months of 2018 have been approved by the China Securities Regulatory Commission (CSRC).
According to a report from Securities Daily CSRC’s Issuance Appraisal Committee reviewed IPO applications from 99 companies during the January -May period, of which 53 were approved, 40 were denied, and decisions for six were deferred, for a pass rate of 53.5%.
CSRC spokesperson Gao Li (高莉) said that it was imperative for the securities regulator to raise the quality of China’s listed companies, strictly control the gateway to the market and prevent the entry of “illness.
According to Gao CSRC had comprehensively stepped up supervision and regulation of IPO’s since 2016 , striking at “fraudulent issuance and applications bearing illness,” as well as “continually making strict requirements for companies undertaking initial public offerings across multiple vectors, including corporate management, standardised operation, information disclosures, financial conditions, ongoing profitability and use of funds raised.”
CSRC pointed to five main reasons for the refusal of IPO application, including non-compliant operations, problems with internal controls, lack of standardised accounting, information disclosure errors, and doubts over profitability.