Alibaba Group Holding Ltd is on a list of Chinese businesses that might be delisted, the U.S. Securities and Exchange Commission announced on Friday, sending the e-commerce giant’s shares down almost 9 percent at midday.
Alibaba is one of more than 270 Chinese companies listed in New York that are at risk of delisting under the Holding Foreign Companies Accountable Act (HFCAA), which aims to resolve a protracted debate over the auditing compliance of U.S.-listed Chinese firms.
U.S. officials have demanded unfettered access to audit working papers of Chinese companies listed on the New York Stock Exchange that are housed in China.
KFC operator Yum China Holdings, biotechnology company BeiGene Ltd, Weibo Corp, and JD.com are among the companies that may be delisted while Washington and Beijing negotiate a resolution to the conflict.
Chairman of the Securities and Exchange Commission Gary Gensler stated on Wednesday that he would not deploy public accounting inspectors to China or Hong Kong until Washington and Beijing agree to full audit access.
He stated that the Public Company Accounting Oversight Board, which regulates audits of U.S.-listed businesses, would need to introduce “specificity and accountability” to Wall Street audits of overseas companies.
The SEC stated that Alibaba has until August 19 to present information contesting identity.
The corporation did not react immediately to a request for comment from Reuters.
Friday saw the addition of Mogu Inc, Boqii Holding Limited, Cheetah Mobile Inc, and Highway Holdings Limited to the list.
Alibaba Group Holding Ltd (9988. HK) was the most recent business to join the U.S. market on Friday. The Securities and Exchange Commission’s list of potential delistings of Chinese firms.
Alibaba shares are tumbling after the US added the e-commerce giant to the list of Chinese companies in danger of getting delisted.https://t.co/uK3Xioit7m via @cocojournalist @ElleBeyoud pic.twitter.com/5R6kgtMdJD
— Peter Elstrom (@pelstrom) July 29, 2022
At the closing bell, Alibaba’s shares were 11 percent lower at $89.37 and ended the month 21.4 percent lower. The shares of the e-commerce behemoth were already under pressure following news that Ma planned to transfer control of Alibaba-affiliated financial technology firm Ant.
Bo Pei, an analyst with U.S. Tiger Securities, explained that applying for primary listing status in Hong Kong does not always indicate that the company believes it will be delisted from the U.S.
Friday saw the addition of Mogu Inc (MOGU.N), Boqii Holding Limited (BQ.N), Cheetah Mobile Inc, and Highway Holdings Limited, among others (HIHO.O).
Alibaba added to SEC's delisting watchlist, shares fall https://t.co/bpmJRIUmMe pic.twitter.com/XkNSukMg2I
— Reuters (@Reuters) July 29, 2022
