Morgan Stanley’s underwriting of Zijin Gold International’s Hong Kong initial public offering (IPO) placed it and its US investors at risk of regulatory, financial and reputational harm, a US House of Representatives committee told the bank on Thursday.
Zijin Gold is a subsidiary of Zijin Mining Group, a global mining company based in China that is on a US government list of companies whose imports are banned over alleged human rights abuses involving Uygurs.
In September, Morgan Stanley assisted with Zijin Gold’s IPO to help its parent company raise funds by selling its non-Chinese gold mining assets and listing them on the Hong Kong stock exchange, the House’s select committee on China said. That raised questions of whether it helped Zijin Mining evade the US prohibitions, according to the committee.
Morgan Stanley declined to comment. Zijin Gold and Zijin Mining did not immediately respond to requests for comment.
“When US financial institutions engage with Chinese firms linked to Uygur forced labour, they undermine the US government’s goal of deterring forced labour globally,” Representative John Moolenaar, the committee’s chair, wrote in a letter to Morgan Stanley CEO Ted Pick.
