Chinese artificial intelligence start-up SenseTime Group which withdraw its $767 million Hong Kong initial public offering (IPO) on Monday and update its prospectus, two sources told Reuters, after it was being placed in U.S. investment blacklist.
The sources, who have direct information about the situation but could not be named it as a public information, said an official announcement will be made to the Hong Kong Stock Exchange shortly.
SenseTime, which was placed on a U.S. investment blacklist on Friday by the Biden Administration, didn’t immediately respond to the request for comment.
Three sources confirmed SenseTime’s decision will pull the initial public offering in its current form, whereas two of those people added the company would update the risk factors in its prospectus with the aim of relaunching the IPO process.
SenseTime had planned to sell 1.5 billion shares in a price range of HK$3.85 to HK$3.99, according to its regulatory filings, they will raise up to $767 million, a figure that had already been trimmed before this year from a $2 billion target.However, rather than setting the listing price on Friday it found itself in urgent talks with the Hong Kong Stock Exchange and its lawyers over the further the deals.
The U.S. Treasury add SenseTime to the list of “Chinese military-industrial complex companies,” accusing the company of having developed facial recognition programs that can determine a target on ethnicity, with a particular focus on identifying the ethnic Uyghurs.
U.N. experts and rights groups estimate more than a million people, mainly Uyghurs and members of other Muslim minorities, have been detained in recent years in a vast system of camps in China’s far-west region of Xinjiang.
China denies abuses in Xinjiang, but the U.S. government and many of rights groups say Beijing is carry out genocide there.
SenseTime further mentioned in a statement on Saturday that it “strongly opposed the designation and accusations that have been made in connection with it,” calling the accusations “unfounded”