Five Chinese state-owned companies, including oil giant Sinopec, opted to delist from the NYSE rather than be audited by Washington
- China’s state-owned companies to pull out of NYSE amid disputes over US audit regulations
- Washington has warned more than 270 Chinese companies of possible withdrawal from the NYSE if Beijing continues to refuse regulations
- Beijing says foreign inspection of local accounting firms’ audit documents, which is required by US regulations, is a national security issue
- Disputes arise amid growing tension between the two global economies, including Nancy Pelosi’s recent trip to Taiwan
Five Chinese state-owned companies announced on Friday that they would withdraw from the New York Stock Exchange amid a refusal to adhere to U.S. auditing regulations and growing tensions between the two global economies.
Washington has warned more than 270 Chinese companies, such as the Alibaba Group, of possible withdrawal from exchanges if Beijing continues to refuse regulation, according to an ABC News report.
Beijing cites foreign inspection of local accounting firms’ audit documents as a national security issue, leading to a dispute over regulations.
The five companies were identified in May as failing to meet U.S. regulators’ auditing standards, which required regulators to see the records of corporate auditors.
PetroChina Ltd., China Life Insurance Ltd. and China Petroleum & Chemical Co. did not refer to disputes between the two countries over Taiwan, after a recent trip by US House of Representatives Speaker Nancy Pelosi sparked concerns. tensions, in their decision to withdraw from the list.
Oil giant Sinopec announced on Friday that it would withdraw from the New York Stock Exchange after refusing audit regulations by the United States
Disputes arise amid growing tension between the two global economies, including Nancy Pelosi’s recent trip to Taiwan
As the first House Speaker to visit Taiwan since 1997, according to an NPR report, Pelosi continued her campaign in defense of Taiwanese democracy and criticism of China.
Hours after Pelosi’s arrival, China ordered live-fire drills in six different locations near Taiwan, restricting airspace and waterways in the region.
The five companies, including Sinopec Shanghai Petrochemical Co. and Aluminum Corporation of China, said they would continue to hold their listings in the Hong Kong and mainland China markets.
“These companies have strictly complied with the rules and regulatory requirements of the US capital market since their listing in the United States and made the election for delisting for their own business considerations,” the China Securities Regulatory Commission said in a statement. .
All of the companies quoted each of their respective small trading volumes of their stocks to the NYSE. A decision to move to Hong Kong would allow each company to be open to non-Chinese investors.
Post-announcement and pre-market Friday, Sinopec fell 4.3%; China Life Insurance fell 5.7%; Aluminum Corporation of China fell 1.7%; PetroChina fell 4.3%; and Sinopec Shanghai Petrochemical Co. fell 4.1%.
Sinopec opened its premarket listing on Friday after falling 4.3%
The biggest drop among the five companies to be delisted is a 5.7% drop for China Life Insurance
China Life and Aluminum Corp. will file for delisting on August 22, which will take effect 10 days later on September 1. Sinopec and PetroChina will follow on August 29, with the delisting taking effect September 8.
Under threat of delisting, Alibaba said last week it would convert its secondary listing in Hong Kong to a dual primary listing, which analysts said could ease the e-commerce company’s access to investors. from the continent.
Previous Chinese companies to be delisted include China Telecom, China Mobile and China Unicom.
The trio were delisted in 2021 following a Trump-era decision to restrict investment in Chinese tech companies, a move that remains unchanged by the Biden administration.