Tech

ALIBABA ANSWERS IT’S ADD TO LIST OF COMPANY FACES WITH THE SEC Protocol


Shares of Alibaba Group Holding Ltd (NYSE: BABA) are down about 3% in Hong Kong after the Securities and Exchange Commission added the US-listed shares of the e-commerce giant to its delisting list. watchlist. Shares traded on the New York Stock Exchange fell 11% on Friday following the announcement, though they were mostly flat in Monday’s pre-opening trading.

Alibaba has added to the list of Chinese companies that can be delisted

The SEC is requiring US auditors to scrutinize the financial statements of Chinese companies as part of the Foreign Companies Accountability Act, which became law in December. 2020. If Alibaba and other foreign companies on the watch list that refuse to allow US auditors to review their financial statements for three consecutive years, the SEC will remove them from US exchanges.

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Based on CNN, investors have watched Alibaba for the past few years. In late 2020, Chinese regulators cracked down on a series of tech companies, including Alibaba. Shares of the Chinese company have fallen nearly 70% from their record high. The crackdown and the weakening Chinese economy have slowed revenue growth for many Chinese tech companies, removing billions of dollars from their market capitalizations.

The SEC is threatening to delist foreign companies if it does not allow US watchdogs to review audits of their finances from three consecutive years. However, China has denied US audits of Chinese companies for years, citing national security concerns. Beijing requires companies with overseas listings to keep their audit papers in mainland China, preventing foreign authorities from examining them.

To date, more than 150 companies have been added to the SEC’s watch list, including Baidu, JD.com, Didi and Yum China Holdings.

Alibaba’s Feedback

On Monday, Alibaba said it would comply with US regulators as it tries to maintain its stock listings in both New York and Hong Kong. In a statement to the Hong Kong Stock Exchange, the Chinese company said it will “continue to monitor market developments, comply with applicable laws and regulations, and strive to maintain its listing status.” listed on both the NYSE and the Hong Kong Stock Exchange.

Last week, Alibaba said it would apply for a dual primary listing in Hong Kong. Although the company’s shares have been traded in both New York and Hong Kong, the latter is a secondary listing, while the former is a primary listing.

Alibaba said in a statement that it expects the main listing process in Hong Kong to be completed by the end of the year.

Originally published on ValueWalk. Read here.

Featured image credit: Photo by Karolina Grabowska; Bark; Thank you!

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