To prepare for its Hong Kong listing, China’s securities watchdog has requested more information from Cainiao, the logistics division of Alibaba Group (9988. HK).
According to a file dated November 10 released by Chinese media on Tuesday, Cainiao was also requested by the China Securities Regulatory Commission (CSRC) to explain how its operations depend on Alibaba and provide information about any plans for spin-offs by Alibaba’s other companies.
A new filing procedure the nation established in March of this year requires Chinese firms wishing to list abroad to submit paperwork to the CSRC before selling shares overseas. Under the existing system, it is standard procedure for the regulator to ask listing aspirants for further information.
Since Alibaba, the Chinese e-commerce behemoth, announced earlier this year that it would split into six divisions, Cainiao is the first of its subsidiaries to be spun off. The CSRC granted its request for an initial public offering (IPO) in Hong Kong last month.
In terms of the structure of the shareholders, the CSRC asked Alibaba and shareholder Shen Guojun why they kept holdings in Cainiao through several foreign platforms. They also wanted to know about a few previous share transfers.
In addition, the CSRC questioned Cainiao about the compliance of the company’s stock incentive program participants with Chinese foreign exchange management laws and other regulations. We also inquired about Cainiao’s compliance with Chinese regulations on data security and personal data protection.
Authorities also inquired about commercial reliance, associated transactions, and duplication among suppliers and consumers regarding Cainiao’s association with Alibaba.
Cainiao was also tasked with providing information on additional divisions’ listing ambitions and explaining Alibaba’s reasoning, principles, and arrangements for spinning out assets for listing. Alibaba did not immediately reply to a request for comment, while Cainaio declined to comment.