BEIJING, Oct 8 (Reuters) – The Shanghai Stock Exchange said it will investigate Zhejiang King Co Ltd after the Chinese maker of air conditioners suspended its initial public offering (IPO) due to media reports of alleged issues, such as overpricing of shares. This probe comes as China’s securities regulators have increased their scrutiny of IPOs and slowed down the pace of share sales in an effort to revive the struggling stock market. Zhejiang King announced on Saturday that it will halt the new share subscription process, originally scheduled for Monday, in response to the media reports, without providing further details. In a statement issued late on Saturday, in response to media inquiries regarding Zhejiang King’s IPO, which included allegations of overpricing of shares and the company’s attempt to list the same assets twice, the Shanghai Stock Exchange acknowledged the media allegations and announced a targeted investigation into the company. In its prospectus published last month, Zhejiang King stated that assets related to its air conditioner business were indirectly acquired from a different listed air conditioner company through a series of asset restructuring schemes. Last month, Zhejiang King aimed to raise 2.38 billion yuan ($325.98 million) at 68.07 yuan per share. According to the prospectus, the company priced its IPO at 51.29 times the 2022 earnings, while its listed peers trade at an average of 27.8 times earnings, according to the China Securities Index Co. ($1 = 7.3010 Chinese yuan renminbi) Reporting by Roxanne Liu and Ryan Woo; Editing by Christian Schmollinger Our Standards: The Thomson Reuters Trust Principles. Acquire Licensing Rights, opens new tab
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