China Life is being investigated by regulators in both Hong Kong and mainland China over the allocation of shares in its IPO last December, according to a report yesterday in the South China Morning Post. China Life is already facing an inquiry from US securities regulators and class action lawsuits from US investors over an audit into accounting irregularities. Investigators in Hong Kong and the mainland are looking into allegations that friends and relatives of senior China Life executives profited from preferential allocations of shares and failed to declare their interests, says the South China Morning Post, citing sources familiar with the investigations. The report says a spokeswoman from Hong Kong’s Independent Commission Against Corruption (ICAC) declined to comment.
China Life raised US$3.5 billion in the world’s largest IPO last year but its shares have plunged recently on investor concerns about disclosure at the state-controlled firm. Its stock has fallen 19 percent in the three months through Monday, although it is still up 18 percent from its IPO price. The insurer’s initial public offering was underwritten by China International Capital Corp, Citigroup, Credit Suisse First Boston and Deutsche Bank.