AI firm Megvii Technology’s plans for a US$500 million listing in Hong Kong have been dealt a setback, with regulators in the city asking the company, which has been blacklisted by the U.S. Government, for more information, three sources said.

Beijing-based Megvii did not win approval for its initial public offering (IPO) at a hearing with the Hong Kong stock exchange’s listing committee Thursday, the sources said.

Megvii was given additional questions it must respond to by the committee, according to the sources, with one adding the decision followed a lengthy discussion of the application.

The meeting was a regularly scheduled committee hearing, during which the IPOs of several other companies were discussed and approved.

The 27-strong committee contains a mix of bankers, lawyers, accountants and investors, and its approval is essential for any IPO candidate.

Concerns about Megvii included questions about its suitability to seek an IPO, said the sources, after the Trump administration last month barred the company from buying U.S. parts and components without U.S. government approval.

Megvii was put on the blacklist along with seven other Chinese companies. Megvii said at the time it strongly objected to being blacklisted, and there were “no grounds” for the designation.

The firm and its banking advisers are in the process of answering the listing committee’s questions, said the sources.

Separate sources previously said the company had looked to go public in Hong Kong in the fourth quarter and planned to raise between US$500 million and US$1 billion.

The biggest market for raising funds though IPOs in 2018, Hong Kong has seen a slowdown this year, though activity has increased since September.

(SD-Agencies)