Five major Chinese companies will delist from the New York Stock Exchange

Five major Chinese companies will delist from the New York Stock Exchange

Five major Chinese companies, including two major oil companies, announced this Friday that they will cease to be listed on the New York Stock Exchange, at a time when the companies of the Asian giant are under the scrutiny of the US regulator.

In separate statements, oil companies Sinopec and PetroChina, insurance heavyweight China Life Insurance, aluminum giant Chalco, as well as a Shanghai-based subsidiary of Sinopec, said they are starting papers for a “voluntary withdrawal.” of the New York Stock Exchange.

The withdrawal comes amid growing tension between Beijing and Washington over US House Speaker Nancy Pelosi’s visit last week to Taiwan, an island China claims as part of its territory.

Beijing reacted angrily to the visit and carried out unprecedented military maneuvers around the autonomous island. Likewise, the Chinese executive suspended cooperation with Washington in areas such as climate change or the fight against drug trafficking.

The five companies were precisely on a list of companies published by the US regulator, the SEC, threatened with being removed from Wall Street if they do not comply with the new audit requirements, in force since the end of last year.

The five companies announced in separate statements that they expect to end their listing on Wall Street in early September. All of them argued their decision by pointing out the cost of maintaining the listing in the United States, as well as the weight of complying with the new audit obligations.

In 2020, the US Congress passed a law specifically targeting Chinese companies, under which the Listed Company Accounting Oversight Board (PCAOB, a non-profit organization created by Congress itself) must have the possibility of inspecting audits of foreign firms listed in the United States.

Mainland Chinese and Hong Kong companies are notorious for not submitting their financial reports to licensed auditors in the United States.

On the list of more than 250 companies at risk of being delisted in the United States is the Chinese e-commerce giant Alibaba.

The Chinese stock regulator commented in turn that the decision to withdraw from Wall Street was made by the five companies based on their “own business criteria”.

The withdrawal “will not affect the continued use by companies of domestic and foreign capital markets for the financing and development” of their activities, the Chinese regulator added in a statement.

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