THE Shanghai Stock Exchange will probe Zhejiang King Co. after the maker of air conditioners halted its initial public offering (IPO) amid media reports about alleged issues such as the overpricing of shares.

The probe comes as China’s securities regulators have tightened their scrutiny of IPOs and slowed the pace of share sales as part of efforts to revitalize a flagging stock market.

Zhejiang King on Saturday said it will suspend the new share subscription procedure initially scheduled today because of the media reports, without specifying the nature of those reports.

In a statement issued late Saturday in response to media inquiries about Zhejiang King’s IPO that include allegations of overpricing of shares and that the company attempted to list the same assets twice, the Shanghai Stock Exchange said it is aware of the media allegations and it will launch a targeted investigation into the firm.

Zhejiang King said in its prospectus that assets related to its air conditioner business were indirectly acquired from a different listed air conditioner company via a series of asset restructuring schemes.

Zhejiang King said last month it aimed to raise 2.38 billion yuan (US$325.98 million) at 68.07 yuan per share.

The firm priced its IPO at 51.29 times 2022 earnings and its listed peers trade at 27.8 times earnings on average according to the China Securities Index Co, Zhejiang King said in the prospectus. (SD-Agencies)