[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]Hong Kong: The collapse of Silicon Valley Bank (SVB), which courted Chinese start-ups, has sparked considerable worry in China, where a slew of founders and companies have scrambled to reassure investors that their exposure was minor or nonexistent.
Before being taken over by the government, SVB worked with over half of all venture-backed tech and healthcare companies in the United States. It also has a Chinese joint venture, which was established in 2012 and targeted the country’s tech elite.
The SPD Silicon Valley Bank, which is 50-50 owned by SVB and its local partner Shanghai Pudong Development Bank, announced on Saturday that its operations were “sound.”
“The bank has a standardized corporate governance structure and an independent balance sheet,” it said in a statement. “As China’s first technology bank, SPD Silicon Valley Bank is committed to serving Chinese science and technology companies, and has always had sound operations in accordance with Chinese laws and regulations.”
It’s unclear what will happen to SVB’s joint venture ownership.
According to corporate database Tianyancha, SVB Financial Group, SVB’s parent company, also has two business consulting firms and one financial service firm in mainland China.
Fears over SVB’s failure rippled around the world, as investors worried about the global banking sector’s larger vulnerabilities and any potential spillover effects.
In a remarkable gesture to restore trust in America’s banking system, the Biden administration guaranteed on Sunday that customers of SVB and Signature Bank, which were closed by regulators, would have full access to their funds.
This appears to have calmed global markets, with American futures rebounding and some Asian markets recouping previous losses.
Read More: ChatGPT has potential to overtake all of its technological rivals.
Not much exposure
In China, at least a dozen firms have published comments in an attempt to reassure investors or clients that their exposure to SVB was limited. The majority were biotech firms.
BeiGene, one of China’s leading cancer-focused medical companies, announced Monday that it has more over $175 million in uninsured cash deposits with SVB, accounting for around 3.9% of its cash, cash equivalents, and short-term investments.
“The company does not anticipate that recent developments with SVB would have a substantial impact on its operations,” it stated.
Zai Lab, a pharmaceutical company, announced that its cash deposits with SVB were “insignificant,” totaling roughly $23 million.
According to the corporation, the closing of SVB “will not have an impact” on its capacity to satisfy its operating expenses and capital expenditure requirements, including payroll.
Andon Health, Sirnaomics, Everest Medicines, Broncus Medical, Jacobio Pharmaceuticals, Brii Biosciences, CStone Pharmaceuticals, Genor Biopharma, and CANbridge Pharmaceuticals were among the other firms that publicly assured investors.
Mobvista, a mobile ad tech startup, and Noah Holdings, a wealth management firm, both stated that their cash holdings at SVB were “small” or “immaterial.”
A well-known selfie app Meitu stated that company had no bank accounts with SVB since 2020. To “prevent any potential public misunderstanding,” it published a statement.
SVB deposits and commercial activities were also rejected by Ascletis Pharma, MicroPort NeuroTech, Antengene Corp, and Suzhou Basecare Medical Corporation.
Pan Shiyi, co-founder and former chairman of Soho China, a large Beijing-based property developer, denied having any money at SVB after claims that he had lost billions of yuan went viral on social media.
“We never created an account or made a deposit with Silicon Valley Bank,” he claimed late Sunday on his Weibo account.[/vc_column_text][/vc_column][/vc_row]
