Palm Springs, the mainland property developer whose boss is at the centre of an ICAC bribes-for-loans case, is being prepared for an initial public offering.
Zeng Wei, the low-profile real estate tycoon who owns 80.5 per cent of the company, has been charged by the anti-graft body with bribing two former senior ICBC (Asia) bankers to obtain loans to fund Palm Springs' projects.
Palm Springs sold US$200 million of pre-IPO bonds to banks and hedge funds earlier this year. Bank of America-Merrill Lynch sold the bonds to investors including Credit Suisse, Citi and global hedge fund Avenue Capital, an institution that manages more than US$19 billion.
While Zeng has not admitted any guilt, the saga is potentially embarrassing for the banks involved, which rely on public trust in their brands and due diligence processes to sell securities.
As participants in Palm Springs' pre-IPO financing, it would be conventional for Merrill, Credit Suisse and Citi to take a lead role in underwriting the developer's eventual share sale to the public, if the deal happens.
Spokesmen for Credit Suisse, Citi and Palm Springs declined to comment.
