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SenseTime relies on investor rebalance for $767M Hong Kong IPO relaunch

SenseTime relies on investor rebalance for $767M Hong Kong IPO relaunch

Chinese facial recognition provider SenseTime has relaunched its US$767 million IPO after retracting its listing in light of being added to the U.S. investment blacklist, reports Reuters.

SenseTime is still seeking to sell 1.5 billion shares between HK$3.85 and $3.99 (US$0.49 to $0.51). The final price will be set on Thursday 23 December with shares due to start trading on the Hong Kong Stock Exchange on 30 December.

Reuters reports that the firm will rely on cornerstone investors investing more, to buy $511 million (67 percent) rather than $450 million (58 percent) as previously anticipated. These cornerstone investors now include state-owned Shanghai Xuhui Capital, Taizhou Culture & Tourism and the HKSTP Venture Fund, reports Forbes.

The firm was added to the U.S. Treasury blacklist due to the development of ethnicity-determining facial recognition software allegedly involveed in human rights violations in Xinjiang. SenseTime said its inclusion on the investment blacklist does not interfere with its business operations, but noted that the lack of investment from the U.S. could impede its ability to raise capital in future and reduce its trading liquidity.

“Our group’s products and services are intended for civilian and commercial uses and not for any military application,” SenseTime said in the revised filings, quotes Reuters.

A week after SenseTime’s blacklisting, eight more Chinese tech firms were added to the U.S. “Chinese military-industrial complex companies” investment blacklist, including fellow facial recognition providers Megvii, CloudWalk and Yitu.

The firm has responded to its inclusion by describing the decision and allegations as “groundless” reports Reuters. Megvii said its inclusion will have no impact on the company’s daily operations.

China’s most ardent English-language state media outlet, the Global Times, repeats the refutation of “groundless accusations”. CloudWalk, among the latest eight blacklisted firms, has also told the Global Times that it strongly opposes and condemns the decision of the U.S. Treasury.

According to the Global Times, CloudWalk said: “The U.S. completely ignored the facts and the actual situation of the company and made unfounded accusations and resolutions, which severely disrupted normal market rules and order, not only harming the legitimate rights and interests of Chinese companies, but also disregarded the legitimate interests of global investors.”

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