Peter Lee Coker Weighs in on Chinese IPO Woes

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As the Chinese economy experiences an array of issues regarding its foray into initial public offerings, reports indicate a sobering environment for the market. Peter Lee Coker, finance industry professional, discusses the future of IPOs in China.

According to financial professional Peter Lee Coker, American businesses have thrived on the concept of and activity surrounding initial public offerings. However, Coker explains that the regulations and general industry understanding of the IPO process took some time to develop within the United States. As a point of comparison, Coker highlights a recent article from Bloomberg Businessweek that details the recent history of Chinese IPOs, the intensive training investment bankers must face and how fraudulent actions have made the country’s market—as a whole—endure developmental problems.

The article assesses the investment banker licensing process—led by sponsor representatives known as “baodai”—and how it once played a critical role in allowing professionals heighten their potential. Due to efforts to curb fraud, the licensing procedure once gave serious bankers a chance to reach a higher status and income; however, that article reveals, “Demand for such bankers is now being eroded by a freeze on IPOs, a surge in people getting licensed and an easing of underwriting rules.”

Peter Lee Coker provides a more in-depth analysis and states, “The reason that the Chinese IPO market has been in the doldrums recently mainly stems from the accounting scandals that took place at numerous Chinese businesses. Many of the Internal Controls that we are accustomed to—here in the United States under GAAP—were not practiced properly in China. Consequently, the US view of the accounting done at Chinese businesses is that in most cases it is not up to our standards.”

As a result, the article explains those bankers who pursued examination have endured a wide array of setbacks as the market moves away from IPO scrutiny and returned to a state of “rationality.” The article reveals, “Securities firms are cutting or ending allowances that were as much as three times salaries and firing licensed bankers who aren’t on deals, while the pool of qualified people expands.” As for the baodai, recruitment consultant Erick Zhou tells Bloomberg Businessweek, “The traditional investment-banking business of the baodai is in a Great Depression. They were expensive in the past because they were in short supply. Not anymore.”

While the IPO atmosphere continues to shift in China and cause a wide array of professional problems for both investment bankers and baodai, Peter Lee Coker notes that current regulations should prompt greater caution from foreign investors. “An investment banker will have to do far more in depth due diligence on a Chinese company that is about to go public. This situation is starting to be corrected but will take some time to do properly. Eventually, the IPO market in China will come back but it may take a couple years,” Peter Lee Coker concludes.


Peter Lee Coker, Chapel Hill, NC professional, has developed a solid career in the financial industry and has collected more than 40 years’ worth of experience in the field. Having excelled in many positions, Peter Lee Coker has accrued wide-ranging business acumen. Today, this award-winning professional assists both domestic and international clients in a variety of projects, typically geared towards business development and financial management.

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Deidre Westinghouse
PR Management Inc.
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