Alibaba says it will ‘strive’ to maintain its New York Stock Exchange listing after SEC adds it to list of Chinese companies facing delisting
Chinese tech giant Alibaba said it would “strive” to maintain its public listing on the New York Stock Exchange, the US financial regulator added it to a list of companies in danger of being delisted amidst a dispute between the US and China over audit requirements.
Alibaba’s shares plunged 11 percent on Friday after the US Securities and Exchange Commission (SEC) added it to the list of firms facing delisting.
The Holding Foreign Companies Accountable Act, passed in 2020, allows regulators to prohibit foreign companies from trading in the US if they cannot inspect their audits for three consecutive years.
The law was passed amidst intensifying tensions between the two countries that over the past several years have led to crippling US sanctions against several Chinese tech firms, notably telecommunications equipment maker Huawei.
Alibaba has listings in New York and Hong Kong, but the Hong Kong listing is secondary, placing it under certain restrictions.
Alibaba said last week it was moving toward a dual-primary listing for the two, which could alleviate some of the pain of a possible delisting in New York.
China does not allow its companies or accountants to provide foreign regulators with access to audit files.
The US and China are reportedly in talks over whether some Chinese firms could be brought into compliance with US audit laws. Alibaba’s New York listing depends upon an agreement between the two countries.
But it said it would ideally like to retain both its Hong Kong and NYSE listings.
“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” Alibaba said in a statement to the Hong Kong stock market.
Alibaba’s shares have slumped more than 70 percent from a high in 2020 as the company has faced pressures from the US as well as from Chinese regulators, which are carrying out an antitrust investigation into the firm.
Co-founder Jack Ma, one of China’s most high-profile entrepreneurs, has all but disappeared from the public eye, and after stepping down as Alibaba’s chair in 2019 is reportedly planning to cede control of Ant Group, a massive financial technology company that was spun out of Alibaba.
Alibaba’s $25 billion (£21bn) New York debut in 2014 was the biggest IPO in US history up to that time.