Bloomberg News

China Life Says It Hasn't Got Notice of Formal Probe

December 30, 2004

China Life Insurance Co., the nation's biggest insurer, said it hasn't received notice from the U.S. Securities and Exchange Commission about a formal investigation into its initial public offering last year.

``We talked to our U.S. lawyer a few hours ago and as of now we have not heard anything,'' said Lan Ya Dong, a spokesman at the Beijing-based insurer in a phone interview today.

Sidley Austin Brown & Wood LLP represents the Beijing-based company in the litigation, Lan said. Robert Pietrzak, a partner representing China Life at Sidley's New York office, was not immediately available to comment. Chan Chi Keung, a spokesman for Hong Kong's Securities & Futures Commission, declined to comment.

The Financial Times reported earlier today that the U.S. regulator has stepped up its probe into formal investigation.

Shares of China Life fell 4.63 percent to close at HK$5.15 in Hong Kong. No filing related to a formal investigation was found on the U.S. regulator's Web site.

China Life, which raised $3.5 billion in last year's biggest public share offer, received an informal inquiry about accounting irregularities in April from the U.S. securities regulator, which asked the company to produce documents and other information on the sale.

Informal SEC inquiries don't always lead to allegations of wrongdoing, according to lawyers who have worked with the SEC. If the inquiry prompts the enforcement staff to suspect that a company has broken U.S. securities laws, the staff must turn to the agency's five commissioners for permission to pursue a formal investigation. In a formal investigation, the SEC staff can demand sworn testimony and subpoena other evidence.

To contact the reporter for this story: Patricia Cheng in Hong Kong at pcheng9@bloomberg.net

To contact the editor responsible for this story: Bill Austin in Tokyo at billaustin@bloomberg.net


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