China presses audio platform Ximalaya to drop US for HK as listing venue

Hong Kong. Source: Robert Bye/Unsplash

China is pressing the country’s largest online audio platform Ximalaya to drop plans to list in the United States and go for Hong Kong instead, three people with knowledge of the matter said, showing how the authorities are seeking to further tighten their grip over private media and internet businesses.

Ximalaya, the country’s top podcast and audio app operator which aimed to go public in New York as soon as this month, has recently been pushed by China’s regulators, including the Cyberspace Administration of China (CAC), to withdraw the listing plans and go public in Hong Kong instead, they said.

The privately-owned company, backed by tech majors Tencent, Xiaomi, Baidu as well as Sony Music Entertainment, is still in talks with the CAC, the sources said.

It will make a final decision about the listing venue within the next two weeks, they added.

The CAC and Ximalaya did not respond to requests for comment.

Shanghai-based Ximalaya, which filed publicly for the U.S. IPO in late April, has started pre-marketing the float since early May and looked to raise about $500 million, said two of the sources.

The potential change of venue comes as China further tightens its ideological grip on private media and internet businesses amid China-U.S. tensions.

China’s ruling Communist Party (CCP) has long maintained a tight grip over ideology and propaganda, especially over state media which it can use to assert its authority.

“Domestic regulators have become more uncomfortable with Chinese media, content firms which operate in the country and obtain voluminous user data, but are incorporated offshore and now seek overseas listings,” one of the sources said.

Another of the sources said that the Ximalaya move also comes amid Beijing’s growing concerns that U.S. regulators will potentially gain greater access to audit documents of Chinese companies listed in New York, notably those that involve massive user or national data.

In March, the U.S. securities regulator began a rollout of rules that would exclude foreign companies from U.S. exchanges if they do not comply with U.S. auditing standards.

“The CAC thought Hong Kong would be better for ideological platforms such as Ximalaya,” said a third person.

Goldman Sachs and Bank of America ,two underwriters on Ximalaya’s IPO, declined to comment. The other underwriters Morgan Stanley and CICC did not respond to requests for comment.

Ximalaya had about 250 million monthly active users, nearly a fifth of China’s population, in the first quarter of 2021, according to its IPO prospectus. It offers users a platform to access free or paid content from roughly 5.2 million professional or amateur content creators.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.