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U.S.-Blacklisted Chinese AI Firm to Seek Hong Kong IPO Approval: Report

By Matthew Walsh / Nov 20, 2019 04:48 PM / Finance

Photo: VCG

Photo: VCG

Beijing-based artificial intelligence company Megvii Technology will reportedly seek approval on Thursday for an initial public offering (IPO) in Hong Kong, despite its presence on a U.S. government blacklist for its role in suspected rights violations.

The company is eyeing proceeds of at least $500 million from the listing, Reuters reported Tuesday, citing unnamed sources familiar with the matter. That figure is around half of the $1 billion targeted by Megvii in an August IPO plan filed in Hong Kong. The company has not yet decided whether to forge ahead with the listing if given approval, Reuters said.

Alibaba-backed Megvii owns Face++, a facial recognition developer that provides technology to government, business, and retail clients. Last month, the United States added Megvii to a trade blacklist, claiming the company was involved in rights violations in China’s far western Muslim-majority region of Xinjiang, allegations that the Chinese government denies.

Megvii said at the time that it strongly objected to the U.S. decision and there were “no grounds” for its addition to the list. Goldman Sachs, which co-sponsors the planned IPO with Citigroup and JPMorgan, said at the time it was reassessing its relationship to the deal “in light of the recent developments.”

Megvii declined to comment to Caixin on the matter. Goldman Sachs and JPMorgan did not reply to Caixin’s request for comment by the time of publication. Caixin was unable to contact Citigroup for comment.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Goldman Sachs Reassessing Sponsorship of Megvii IPO After U.S. Export Ban: Report

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