Chinese companies and tycoons rush to appease investors after SVB collapse sparks fear

Hong Kong (CNN) The collapse of Silicon Valley Bank (SVB), which has courted Chinese start-ups, has sparked widespread concern in China, where a string of founders and companies rushed to appease investors by saying their exposure was insignificant or non-existent. used to be.

SVB, which worked with nearly half of all venture-backed tech and healthcare companies in the United States before being taken over by the government, has a Chinese joint venture, which was founded in 2012 and targeted the country’s tech elite .

The SPD Silicon Valley Bank, which was owned 50-50 by SVB and local partner Shanghai Pudong Development Bank, said on Saturday its operations were “healthy”.

“The bank has a standardized corporate governance structure and an independent balance sheet,” the bank said in a statement. “As China’s first technology bank, SPD Silicon Valley Bank is committed to serving China’s science and technology companies, and has always had sound business operations in compliance with China’s laws and regulations.”

It is unclear what will happen to SVB’s ownership in the joint venture.

SVB Financial Group, the parent company of SVB, also has two business consulting firms and one financial services company in mainland China, according to company database Tianyancha.

Concerns about SVB’s bankruptcy have spread around the world as investors worried about the broader risks to the global banking sector and a possible spillover effect.

In an extraordinary effort to restore confidence in the US banking system, the Biden administration guaranteed on Sunday that customers of SVB and Signature Bank, which was shut down by regulators, will have access to all of their money.

That move appears to have quieted global markets, with US futures rallying in response and some Asian markets recovering previous losses.

SVB’s headquarters in Santa Clara, California, on March 10, 2023.

No significant exposure

In China, at least a dozen companies have issued statements since the collapse of the SVB to pacify investors or customers, saying their exposure to the lender was limited. Most were biotech companies.

BeiGene, one of China’s largest cancer-focused pharmaceutical companies, said Monday it had more than $175 million in uninsured cash deposits with SVB, representing about 3.9% of its cash, cash equivalents and short-term investments.

The company does not expect the recent developments with SVB to have a significant impact on its business.

Zai Lab, a pharmaceutical company, announced that its cash deposits with SVB were “intangible” at approximately $23 million.

The closure of SVB “will have no impact” on the company’s ability to meet operating costs and capital expenditures, including payroll, it said.

Other companies publicly underwriting investors included Andon Health, Sirnaomics, Everest Medicines, Broncus Medical, Jacobio Pharmaceuticals, Brii Biosciences, Cstone Pharmaceuticals, Genor Biopharma and CANbridge Pharmaceuticals.

Mobile ad technology company Mobvista and asset management company Noah Holdings said their cash at SVB was “minimal” or “intangible”.

Popular selfie app Meitu said it had no bank accounts with the SVB since 2020. It issued a statement “to avoid possible public misunderstanding”.

Ascletis Pharma, MicroPort NeuroTech, Antengene Corp and Suzhou Basecare Medical Corporation also denied having any deposits or business dealings with SVB.

Pan Shiyi, co-founder and former chairman of Soho China, a major Beijing real estate developer, denied having any money with SVB after social media reports went viral that he had lost billions of yuan.

“We never opened an account with Silicon Valley Bank nor made a deposit,” he said on his Weibo account late Sunday.






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