U.S. lawmakers have issued subpoenas to JPMorgan Chase and Bank of America, requesting documents related to their involvement in the initial public offering (IPO) of Contemporary Amperex Technology (CATL), a Chinese battery manufacturer. The House of Representatives’ Select Committee on the Chinese Communist Party is investigating the national security risks associated with U.S. banks underwriting companies identified by the Department of Defense as having military ties.
In April, the committee advised both banks to withdraw from CATL’s IPO, citing potential regulatory, financial, and reputational risks. Despite this warning, JPMorgan and Bank of America proceeded with underwriting CATL's Hong Kong listing, which raised $5.2 billion in May.
Rep. John Moolenaar (R., Mich.), chairman of the committee, expressed concerns about CATL's role in battery manufacturing and its connection to China's military-civil fusion policy. The committee said that the banks did not provide previously requested information regarding the IPO.
JPMorgan CEO Jamie Dimon defended their decision during an interview on Bloomberg TV, stating that thorough due diligence was conducted. A spokesperson for Bank of America indicated that they would continue cooperating with the committee.
CATL has argued that its inclusion on the Department of Defense list was erroneous and is working to resolve this issue with U.S. authorities. According to CATL’s prospectus, this designation is not expected to significantly impact its business operations outside a limited number of U.S. governmental entities.
As of Wednesday, CATL’s shares listed in Hong Kong have increased by 65% since their IPO debut.
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