WeDoctor drops Credit Suisse from $1 billion IPO role over Luckin probe: sources

HONG KONG (Reuters) – Chinese online healthcare platform WeDoctor has dropped Credit Suisse (CSGN.S) from a list of banks it had lined up lead its up to $1 billion initial public offering in Hong Kong, two people of direct knowledge told Reuters.

WeDoctor’s decision comes days after China’s securities regulator said it would investigate claims of fraud at coffee startup Luckin Coffee (LK.O) where an internal investigation had found that its chief operating officer and other staff fabricated sales transactions worth about 2.2 billion yuan.

Credit Suisse, together with Morgan Stanley (MS.N), CICC (3908.HK) and Haitong International Securities (0665.HK), worked on Luckin Coffee’s $645 million U.S. IPO in May last year.

“WeDoctor’s executives have concerns over Credit Suisse’s role in Luckin-related deals. Given uncertainty over the outcome, the bank is probably no longer suitable to work on WeDoctor’s IPO,” said one of the people, who declined to be named as the information is confidential.

Credit Suisse declined to comment.

WeDoctor said: “WeDoctor is scrupulous in our consideration of partners. A selection of sponsors is underway and a final decision has not been made.” WeDoctor declined to comment further on its IPO plans.

CICC and Morgan Stanley have begun informal investigations into the due diligence they did for the Luckin IPO since the Chinese coffee chain’s announcement on Thursday, Reuters reported last week, citing sources. These two banks, Haitong and Credit Suisse had declined to comment last week.

WeDoctor, which is backed by Tencent Holdings Ltd (0700.HK) and Goldman Sachs (GS.N), in March mandated Credit Suisse, JPMorgan (JPM.N) and China Merchants Bank International for its float, which could value the company at up to $10 billion.

The company is now looking for a replacement for Credit Suisse, said the people.

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