SenseTime delays HK debut after US blacklisting

HONG KONG • Chinese artificial intelligence start-up SenseTime said yesterday that it was postponing a US$767 million (S$1 billion) initial public offering (IPO) in Hong Kong after it was blacklisted by Washington over accusations of genocide in Xinjiang region.

The United States Treasury announced the ban on Friday, saying that SenseTime's facial recognition programmes were designed in part to be used against Uighurs and other mostly Muslim minorities in Xinjiang. China denies abuses in Xinjiang.

The blacklisting immediately cast a shadow over the company's upcoming IPO plans in Hong Kong, which had been due to take place a week later. It also illustrated the risks investors face from competing sanctions as relations between the world's two biggest economies sour.

SenseTime yesterday filed a statement to the Hong Kong Stock Exchange, saying it would postpone its listing "to safeguard the interests of the potential investors" as they weigh the impact of being placed on the blacklist.

SenseTime said it "remains committed" to listing in Hong Kong soon and would fully refund those who had already invested.

The US sanctions and blacklisting can prevent individuals from obtaining visas to the US, block assets under US jurisdiction, and prevent the targets from doing business with US individuals or entities - effectively locking them out of the US banking system.

A blacklisting would make it all but impossible for US investment banks usually involved in Hong Kong listings to be involved, or for a US national to invest in the IPO.

China yesterday decried the latest sanctions, which were also directed against two government officials in Xinjiang.

"If the US insists on acting rashly, China will have to take effective measures to firmly fight back," foreign ministry spokesman Wang Wenbin told reporters.

Founded in 2014 by academic Tang Xiao'ou at the Chinese University of Hong Kong, SenseTime has gone on to become one of China's most valuable start-ups in just a few years.

During the coronavirus pandemic, SenseTime's software has been used to check commuter temperatures and determine if they are wearing a face mask. It can also identify people even when their mouths are covered.

SenseTime criticised the latest US blacklisting, saying in a statement over the weekend that it was "caught in the middle of geopolitical tension". It added: "The accusations are unfounded and reflect a fundamental misperception of our company."

The company had already been placed on the US Department of Commerce's blacklist in 2019 because Washington said its technology had been used for mass surveillance in Xinjiang.

AGENCE FRANCE-PRESSE