Friday, November 17, 2017

Hong Kong exchange rejects AMTD’s insurance IPO

Hong Kong insurance brokerage AMTD Strategic Capital has had its application for an initial public offering rejected by the city’s stock exchange.

The prospectus was reportedly described as “substantially incomplete” by Hong Kong Exchanges & Clearing (HKEx) and attempts to appeal the decision ended in failure. China Everbright and China Merchant are sponsoring the deal, which was expected to raise up to US$200 million, according to the FT.

The company claims on its website that it is “the largest local corporate insurance brokerage and risk solutions firm in Hong Kong”, focusing on risk management, business insurance and employee benefit insurance broking.

However, it is also involved in investment and this part of the business may have caught the attention of HKEx. Local press reports in Hong Kong claimed that the company’s application was rejected due to inadequate disclosures over investment strategies, investment funds, risk management and accounting treatment.

This is somewhat surprising as the company’s parent is a financial group with substantial experience advising on Hong Kong securities transactions and is owned by Morgan Stanley Private Equity Asia, LR Capital Group (a multi-family office representing Li Ka-shing and other tycoons) and China Minsheng Investment.

It lists several prominent Chinese groups among its clients, such as HNA, Fosun and China Huarong.

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