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Another 80 Chinese companies threatened by the US to delist

Beijing denied US officials access to the books of businesses, putting many companies on the US floor at risk of being delisted.

The US Securities and Exchange Commission (SEC) on May 4 added more than 80 Chinese companies, including e-commerce giants and Pinduoduo, to its list of companies that could be subject to a ban. delisting on US exchanges. The reason is that Beijing refuses to let auditors access the books of these enterprises.

This list was created under a 2020 law. The law requires businesses listed on the US stock exchange to prove they are not controlled by a foreign government. If a company fails to prove this, or the Public Companies Accounting Oversight Committee (PCAOB) is unable to audit them for 3 consecutive years for verification, its shares will be delisted from the public. US stock exchange.

Several other large Chinese companies, such as China Petroleum & Chemical Corp., JinkoSolar Holding, NetEase and NIO have also been included in the list.

US authorities have long been expected to tighten control of about 200 companies listed on the New York Stock Exchange, whose parent companies are located in China and Hong Kong. The release of the company listings by the SEC over the past few weeks has discouraged investors from hoping for a deal between Beijing and Washington officials.

The US and China have been at odds for the past two decades over a requirement that all US-listed companies have their books audited by the country. Since the US Congress passed this law in 2020, the PCAOB and the SEC have developed a policy framework for identifying non-compliant companies.

Companies will be delisted if they refuse this regulation for 3 consecutive years. This means they will have to leave the NYSE and Nasdaq as early as 2024.

Critics say Chinese companies enjoy many trade incentives, including access to US stock exchanges, but still receive government support and operate within an unknown system. clear. However, Beijing officials countered that China’s national security law forbids them from submitting their books to US officials.

Ha Thu (according to Bloomberg)

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