Sponsor resignation derails Weigao IPO

摘要

Morgan Stanley's last-minute resignation from a Hong Kong listing has highlighted the sensitivities facing IPO arrangers in a city where sponsors are held criminally liable for misleading investors. The US bank resigned from the US$300m-$400m spin-off of shandong weigao orthopaedic device 24 hours after the company passed a Stock Exchange of Hong Kong listing hearing on June 4. Pre-marketing, scheduled to start on June 8, will now be delayed by months. It is unusual for a sponsor to abandon an IPO so close to launch, and Morgan Stanley's move left the company's parent and two remaining sponsors scrambling to reassure investors that there was nothing wrong with the deal.