Morgan Stanley criticised on Chinese social networking site over IPO

19 January 2011

Morgan Stanley has been accused of undervaluing an initial public offering (IPO) on the Chinese equivalent of micro-blogging website Twitter.

Li Guoqing, chief executive of Dangdang, made the comments on the Sina Weibo social networking website alleging that the investment bank’s underwriters had valued his firm too low.

Mr Guoqing, who was quoted by Bloomberg, said: “I am openly here criticising investment banks, criticising Morgan Stanley. So what ? Can't Morgan Stanley be criticised?”

The post on the website has attracted thousands of comments with some responses originally thought to have come from employees at the financial services institution.

However, an investigation by Morgan Stanley found that this was not the case.

In a statement, the bank said: “These comments [by Mr Guoging] are offensive, highly unprofessional and do not reflect industry practices. We condemn such behavior that can risk damaging a company's brand and reputation.”

Bloomberg reported that Morgan Stanley managed the IPO in collaboration with Swiss bank Credit Suisse and valued Dangdang at $1.25 billion.

By Jim Ottewill

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