House China Committee asks JPMorgan, Bank of America to pull out of Chinese battery company’s IPO

The IPO environment has been bad enough for US banks, with tumultuous markets leading many companies to shy away from going public.

Now, the head of a US congressional committee is asking JPMorgan and Bank of America to pull back from a big fee-generating opportunity on their books, alleging that the Chinese company in question — Contemporary Amperex Technology Limited, or CATL —develops products that have military and surveillance applications and has suppliers that utilize forced labor camps. The two US banks have been tapped to run the offering, along with a pair of Chinese financial institutions.

Republican representative John Moolenaar, who runs the House Select Committee on the Chinese Communist Party, sent letters to CEOs Jamie Dimon and Brian Moynihan asking the leaders to withdraw from this offering.

“We are troubled by reports indicating JPMorgan and other American banks aggressively pursued the IPO of Chinese military company CATL despite clear and public knowledge of CATL’s military-related designation and association with sanctioned entities,” he wrote in the letter to Dimon. “Given CATL’s direct links to China’s military modernization, its complicity in the ongoing genocide in Xinjiang, and the grave risks it poses to U.S. national and economic security, we urge JPMorgan to withdraw from underwriting CATL’s upcoming IPO.”

JPMorgan’s equity underwriting fees were $324 million in the first quarter, well below estimates and the weakest since Q4 2023. Bank of America’s equity underwriting fees of $272 million likewise trailed analysts’ projections in Q1.

CATL is poised to raise at least $5 billion and list on the Hong Kong Stock Exchange sometime in the second quarter, according to Reuters.