Chinese artificial intelligence company SenseTime Group Inc. is now discussing matters regarding its Hong Kong initial public offering (IPO) prospectus with its advisers.
The sources said that the company came up with its plan of withdrawing an IPO worth $767 million. It took place after the United States imposed a ban on the firm which delayed its IPO plans.
SenseTime Withdraws Hong Kong IPO
According to a report by CNBC on Sunday, Dec. 12, two unknown sources confirmed to Reuters that the startup announced that it would go to the Hong Kong Stock Exchange soon. The people who are familiar with the situation chose to be anonymous since the information is not yet published in public.
After the Biden Administration placed SenseTime on the US Investment blacklist on Friday, Dec. 10, SenseTime did not leave any comment regarding the matter.
Furthermore, one source claimed that the Chinese AI firm decided to pull its IPO while the other two said that the startup will release an update in its prospectus soon. This is connected to the company's plans of relaunching its IPO bid in the process.
The report noted that the regulatory filings indicated SenseTime's plans to sell 1.5 billion shares ranging from HK$3.85 to HK$3.99. Previously, the company intended to raise $2 billion but later it was trimmed to $767 million.
Instead of negotiating the listing price last week, the firm is found out to be talking with its lawyers about the potential outcome of this deal.
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Why Does the US Ban SenseTime?
In another report by Bloomberg on Monday, Dec. 13, the US Treasury issued a ban on SenseTime following its allegations about the company's facial recognition software that is used to oppress ethnic groups in Western China, particularly the Uyghur Muslims.
As such, this report caught a lot of attention from international experts. According to the UN professionals, the people in the Xinjiang autonomous region were detained over the past years in several camps.
The Chinese government denied this accusation regarding the company's abuses, but the US believed that genocide is indeed a "real" thing in China.
In response to this, SenseTime said on Saturday, Dec. 11, that the allegations were all "unfounded." It expressed its opposition to that "designation" and other linked accusations to the case.
SenseTime Survives Previous Ban
Last year, Tech Times reported that SenseTime and Megvii survived the US ban and even managed to enter Washington's entity list.
At that time, the AI unicorn giants had escaped the punishment where Chinese companies were prohibited to access US-made technologies.
With that, Megvii accomplished the potential sanction by directly purchasing the tools from third-party supplies. Amid the US Entity ban, various Chinese firms have been using this tactic to market their products in North American countries.
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Written by Joseph Henry
