China International Capital Corporation Investigated by CSRC Over S2C IPO Due Diligence Failure

China International Capital Corporation's Regulatory Troubles

China International Capital Corporation (CICC), often referred to as China’s Goldman Sachs, is facing scrutiny from the China Securities Regulatory Commission (CSRC) regarding its sponsorship of the S2C initial public offering (IPO) in 2021. The CSRC has issued a notice of case filing, indicating CICC is suspected of failing to perform adequate due diligence.

The CSRC's Actions and Market Implications

CICC received the notice on October 11, which coincides with the regulator's tightening of IPO regulations. This step emphasizes the CSRC's commitment to maintaining market integrity while encouraging healthy investment practices.

• Investigation triggered by due diligence concerns.
• CSRC's statement reflects a push for market confidence.
• Wu Qing's leadership aims to root out unqualified firms.

This investigation follows a series of regulatory actions impacting both CICC and S2C, which had previously withdrawn its IPO application amid allegations of financial misreporting.

CICC's Response and Continuing Operations

In response to the investigation, CICC announced its intention to fully cooperate with the CSRC and adhere to pertinent regulations. The investment bank reassured stakeholders that its operations remain stable, navigating regulatory scrutiny proactively.

The Broader Context of IPOs in China

The CSRC's intensified oversight stems from prior misconduct within the sector, including significant fines against major auditing firms and stricter measures against companies like China Evergrande Group.