5th June 2023 – (Beijing) China’s securities watchdog, the China Securities Regulatory Commission (CSRC), has requested additional information from Zhuhai Wanda Commercial Management Group regarding its corporate governance as part of its IPO application in Hong Kong. The request for supplementary information comes amid uncertainty over the timing of Zhuhai Wanda’s IPO, which has led to investor concerns about the liquidity of parent company Wanda Commercial, a unit of China’s largest commercial property developer, Dalian Wanda Group. If the IPO is not completed by the end of the year, the company would need to repurchase shares worth 40 billion yuan ($5.62 billion).
According to a filing dated 2nd June, the CSRC has asked Zhuhai Wanda to provide additional information on financial dealings with its controlling shareholder. Enquiries have included whether the company is providing guarantees to its controlling shareholder and related parties, dividend payout policy, and measures to ensure that the IPO proceeds will not be used in real estate development. The CSRC has also requested details on how the company derived the 98.8% average letting rate in the plazas it manages, and how it is preventing staff from falsely reporting the numbers.
Last week, Fitch downgraded Wanda Commercial to “BB-” from “BB+” due to a weakening in the consolidated profile of parent company Dalian Wanda Group. This follows media reports that sister company Wanda Properties was seeking to extend short-term bank loans. The CSRC’s request for additional information from Zhuhai Wanda underscores the increasing regulatory scrutiny that Chinese companies are facing as they seek to go public.
