China To Close Loophole Used by Tech Firms for Foreign IPOs

China is planning to ban companies from going public on foreign stock markets through variable interest entities -- Bloomberg reported Wednesday, citing people familiar with the matter -- closing a loophole long used by the country's technology industry to raise capital from overseas investors. From the report: The ban, intended in part to address concerns over data security, is among changes included in a new draft of China's overseas listing rules that may be finalized as soon as this month, said the people, asking not to be identified discussing private information. Companies using the so-called VIE structure would still be allowed to pursue initial public offerings in Hong Kong, subject to regulatory approval, the people said. The China Securities Regulatory Commission said on its website Wednesday that a media report about banning the overseas listings of companies using the VIE structure is not true, without giving further details. [...] The overhaul would represent one of Beijing's biggest steps to crack down on overseas listings following the New York IPO of ride-hailing giant Didi Global, which proceeded despite regulatory concerns.

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