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Megvii to postpone Hong Kong IPO till next year: source

Decision follows stock exchange's request for more information

Megvii's IPO was expected to be worth anywhere between $500 million and $1 billion.   © AP

HONG KONG (Nikkei Markets) -- Chinese facial recognition technology startup Megvii Technology has decided to postpone its planned initial public offering in Hong Kong, a person familiar with the matter said on Tuesday.

The decision came after the Hong Kong stock exchange reportedly asked for more information from the company, following its inclusion in the U.S. Commerce Department's so-called Entity List. The U.S. government in October included 28 Chinese governmental and commercial organizations, including Megvii, on that list for engaging in or enabling activities involving human rights violations and abuses in China's campaign targeting predominantly Muslim ethnic minorities in the Xinjiang Uighur Autonomous Region.

Megvii had at the time said that it "strongly objects" to its inclusion on the list, saying such a designation had "no grounds."

"It is realistic for the company to push back the IPO plan to next year," the source, who requested not to be identified, said.

IFR, citing sources, had earlier reported the company had decided to postpone its $500 million to $1 billion IPO to next year.

The Beijing-based company had in August filed a draft prospectus for its IPO with the Hong Kong stock exchange. Citigroup, Goldman Sachs and JPMorgan are the joint sponsors for the offering, according to the document.

The Chinese government has been under scrutiny for its treatment of ethnic minorities in Xinjiang in northwestern China, particularly over the operation of "re-education camps," which have been widely accused of human rights violations.

-Benny Kung

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