China's Sensetime withdraws $ 767 million preliminary public providing after US ban – sources

© Reuters. FILE PHOTO: The artificial intelligence (AI) startup SenseTime logo will be seen in its Hong Kong, China office on Aug 18, 2021. The picture was taken on August 18, 2021. REUTERS / Tyrone Siu / File Photo

By Kane Wu and Scott Murdoch

(Reuters) – Chinese artificial intelligence start-up SenseTime Group will withdraw its $ 767 million initial public offering (IPO) in Hong Kong on Monday and update its prospectus, two sources told Reuters after it was blacklisted for US -Investment has been made.

The sources, who have direct knowledge of the situation but could not be named as the information was not yet public, said an official announcement on the Hong Kong Stock Exchange would be made shortly.

SenseTime, blacklisted for U.S. investments by the Biden administration on Friday, did not immediately respond to a request for comment.

Three sources confirmed SenseTime's decision to go public in its current form, while two of those people added that the company will update the risk factors in its prospectus to resume its IPO.

SenseTime had planned to sell 1.5 billion shares at a price range of HK $ 3.85 to HK $ 3.99 to raise $ 767 million, a number earlier this year from a target, according to regulatory filings cut by $ 2 billion.

However, instead of fixing the listing price on Friday as planned, it was in urgent talks with the Hong Kong Stock Exchange and its lawyers about the future of the deal.

The US Treasury Department has named SenseTime on a list of "Chinese military-industrial complex companies" accusing the company of developing facial recognition programs that can determine the ethnicity of a target, with a particular focus on identifying ethnic Uyghurs.

UN experts and human rights groups estimate that over a million people, mostly Uyghurs and members of other Muslim minorities, have been detained in a huge camp system in China's extreme western region of Xinjiang.

China denies the attacks in Xinjiang, but the US government and many human rights groups say Beijing is perpetrating genocide there.

SenseTime said in a statement on Saturday that it “strongly opposed the label and allegations made in relation to it” and described the allegations as “unfounded”.

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