Regulators in Hong Kong have asked Megvii for more information on its planned initial public offering (IPO), in what Reuters describes as “a setback” for the facial recognition unicorn’s stock launch. The news comes on the heels of a report from the International Consortium of Investigative Journalists on a new trove of leaked documents allegedly exposing the extent of systematic surveillance, including the use of facial recognition, and oppression of the Muslim minority in China’s Xinjiang Province.
In a hearing with the Hong Kong Stock Exchange’s Listing Committee last week, a lengthy discussion of the application was followed by a demand from the committee that Megvii answer an additional set of questions, unnamed sources told Reuters. Several IPO applications from other companies were discussed and approved during the committee hearing.
Neither the company nor any of Citigroup, Goldman Sachs and JPMorgan, the banks working with Megvii on the IPO, responded to a request from Reuters for comment.
Questions from the committee included concerns about its suitability for a public offering, after it was hit with a ban from the U.S. government last month. Goldman was reported to be reconsidering its support for the IPO in the wake of the announcement, but the company has defended itself against accusations of wrong-doing as it pushed forward with its plans.
The IPO was planned for the fourth quarter of 2019, with a goal of raising between $500 million and $1 billion.