Bloomberg reported that Chinese authorities have added more than 80 companies including JD.com, Pinduoduo and Bilibili to an expanded list of companies potentially facing “expulsion” from the exchange. US stock exchange. The reason is believed to be that Beijing has refused to allow financial audits of these businesses.
The US Stock Exchange (SEC) on Wednesday named the group to a list of Chinese companies listed in the US that face delisting under a 2020 law. Some companies China’s largest traded on the US stock exchange including China Petroleum & Chemical, JinkoSolar Holdings, NetEase and NIO also added to the list.
The regulator on Wall Street is expected to crack down on about 200 companies listed on the New York Stock Exchange but whose parent companies are based in China because they refuse to allow US officials to inspect. The SEC’s disclosure of the above list over the past several weeks has spooked investors, especially as they had previously hoped for a deal to be established between Beijing and Washington.
At the end of June, Didi Global launched the New York Stock Exchange in anticipation and quickly attracted an investment capital of 4.4 billion USD. However, the wind turned quickly, as Didi repeatedly faced great pressure from Chinese authorities due to concerns about leaking sensitive data. As a result, Didi Global’s share price has plunged 44% compared to the time of the IPO and now it is time to cancel the listing.
At the end of 2020, President Donald Trump, while still in office, signed into law a law banning foreign companies from listing shares in the US if the audit records of the last 3 years are not reviewed by US regulators. elaborate.
The passage of the Foreign Corporate Accountability Act (HFCAA) after nearly a decade of failure shows that US and Chinese regulators have been unable to reconcile their divergent expectations regarding corporate governance. How the audit will be conducted.
To find a way to avoid the impact, many Chinese companies have to list shares on the US and Hong Kong exchanges. The first was Alibaba and then there were about 15 more businesses that followed suit.
For many years now, US regulators have complained constantly that they never get the necessary transparency regarding the audit of Chinese companies listed on the US stock exchange because the Chinese side does not regularly file necessary paperwork.
In addition to pressure from the US, many Chinese technology companies are also struggling at home. For about two years now, Beijing has taken action to rectify the technology sector when too many companies are growing rapidly, out of control. Alibaba is one of the worst victims, in addition to a $ 2.8 billion fine, the group was also stopped from its plan to IPO financial branch Ant, leading to a series of restructuring requirements later.
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