August 18, 2022

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The US SEC adds Alibaba to the list of Chinese companies at risk of delisting

The US SEC adds Alibaba to the list of Chinese companies at risk of delisting

July 29 (Reuters) – Alibaba Group Holdings Ltd. (9988.HK)is among a list of Chinese companies that could face delisting, the U.S. Securities and Exchange Commission said on Friday, sending the e-commerce giant’s shares down nearly 9% in midday trading.

Alibaba is among more than 270 Chinese companies listed in New York identified as at risk of delisting under the Foreign Holding Company Accountability Act (HFCAA), which aims to address a long-running dispute over audit compliance for Chinese companies listed in the United States.

US regulators are demanding full access to audit working papers of Chinese companies listed in New York, and stored in China.

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While Washington and Beijing are in talks to settle the dispute, KFC Yum China Holdings (9987.HK)biotechnology company BeiGene Ltd (6160.HK)Weibo Corp and JD.Com are among the companies that could face delisting.

On Wednesday, Securities and Exchange Commission Chairman Gary Gensler said he would not send public accounting inspectors to China or Hong Kong unless Washington and Beijing agreed to have full audit access.

He said the Public Company Accountability Oversight Board, which oversees audits of US-listed companies, would need to be able to bring “privacy and accountability” to audits of foreign companies listed on Wall Street.

The Securities and Exchange Commission said Alibaba has until August 19 to present evidence challenging its identification.

The company did not immediately respond to a Reuters request for comment.

Other companies added to the list on Friday include Mogu Inc (MOGU.N)Boqii Holdings Co., Ltd. (BQ.N)Cheetah Mobile Inc and Highway Holdings Limited (HIHO.O).

(Nivedita Balu reports in Bengaluru); Editing by Krishna Chandra Elori

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