China Firms Rush To Distance Themselves From SVB Collapse

 

Over a dozen Hong Kong-listed companies have stepped forward to say they had little or no exposure to collapsed Silicon Valley Bank (SVB).

The disclosures came amid fears that the failure of the US lender could have a negative psychological impact on China’s markets.

Startup-focussed SVB Financial Group, which did business as Silicon Valley Bank, collapsed on Friday in the largest bank failure since the 2008 financial crisis. US officials have stepped in to stem financial fallout, saying that all customers will have access to their deposits from Monday.

 

Also on AF: Silicon Valley Bank Collapse Adds to China Investors’ Woes

 

Many Chinese tech start-ups, especially those with dollar funding, have opened US accounts at SVB.

At least one WeChat group with several hundred members has been formed by anxious Chinese clients of SVB seeking to safeguard their interest.

On Saturday, SVB’s Chinese joint venture with Shanghai Pudong Development Bank also said it has a sound corporate structure and an independently operated balance sheet.

Chinese firms, in an effort to reassure clients and investors, scrambled through Sunday to Monday to release statements on the extent of their exposure to the bank.

 

‘Minimal exposure’

China-based drug developer Beigene said it has uninsured cash deposits held at the bank representing 3.9% of its last reported total cash and cash equivalents. It also said it did not expect the developments to impact its operations.

Mobile advertising platform Mobvista said it has deposit accounts with the bank with a balance of $430,000. The accounts represent a minimal portion of cash and cash equivalents, it added.

Over the weekend six Hong Kong-listed companies, mostly Chinese pharmaceutical firms, also disclosed their cash deposits at Silicon Valley Bank.

Brii Biosciences revealed it had the highest percentage of cash and bank balances at SVB, at less than 9%. It did not provide a monetary figure for the deposits.

“Notwithstanding the closure of SVB, the existing cash and bank balances of the company continue to be sufficient to meet its working capital, capital expenditures and material cash requirements from known contractual obligations for the next three years,” Brii Biosciences said.

Broncus Holding Corporation said it held $11.8 million at SVB, representing around 6.5% of its total cash.

CStone Pharmaceuticals, Noah Holdings Private Wealth and Asset Management Limited and Jacobio Pharmaceuticals Group said in different statements they had less than 0.2-0.5% of their total cash at SVB.

CANbridge Pharmaceuticals said the amount of cash deposited with SVB is “immaterial and is generally within the amount guaranteed by the FDIC accordingly”, without giving any figures.

Ascentage Pharma Group International said in a filing on Sunday is had not had any business dealings with SVB.

Tycoon Pan Shiyi, co-founder and former chairman of commercial property developer SOHO China, also said on his Weibo account that he had never opened an account or deposited at the bank.

 

• Reuters, with additional editing by Vishakha Saxena

 

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