Five Chinese companies to delist from NYSE amid US tensions
Published: 09:01 AM, 13 August 2022 Updated: 01:07 PM, 13 August 2022
Five Chinese state-owned companies, including oil giant Sinopec 600028.SS and China Life Insurance 601628.SS, said on Friday they would delist from the New York Stock Exchange, amid economic and diplomatic tensions with the United States.
The companies, which also include Aluminium Corporation of China (Chalco) 601600.SS, PetroChina 601857.SS and a separate Sinopec entity, Sinopec Shanghai Petrochemical Co 600688.SS, each said they would apply to delist their American Depository Shares this month.
The five, which in May were flagged by the U.S. securities regulator as failing to meet its auditing standards, will keep their listings in Hong Kong and mainland Chinese markets.
Beijing and Washington are in talks to resolve a long-running audit dispute which could potentially result in Chinese companies being banned from U.S. exchanges if they do not comply with U.S. rules.
Washington has long demanded complete access to the books of U.S.-listed Chinese companies, but Beijing bars foreign inspection of audit documents from local accounting firms, citing national security concerns.
There was no mention of the auditing dispute in separate statements by the Chinese companies outlining their moves, which come amid heightened tensions after last week's visit to Taiwan by U.S. House of Representatives Speaker Nancy Pelosi.
"These companies have strictly complied with the rules and regulatory requirements of the U.S. capital market since their listing in the U.S. and made the delisting choice for their own business considerations," the China Securities Regulatory Commission (CSRC) said in a statement.
The agency added that it would keep "communication open with relevant overseas regulatory agencies."
The oversight row, which has been simmering for more than a decade, came to a head in December when the Securities and Exchange Commission (SEC) finalized rules to potentially prohibit trading in Chinese companies under the Holding Foreign Companies Accountable Act. It said 273 companies were at risk.
Some of China's largest companies including Alibaba Group Holdings BABA.N, JD.com Inc 9618.HK, JD.O and Baidu Inc BIDU.O are among them. Alibaba said last week it would convert its Hong Kong secondary listing into a dual primary listing which analysts said could ease the way for the Chinese e-commerce giant to switch primary listing venues in the future. Read full story
In trading on Friday, US-listed shares of China Life Insurance LFC.N and oil giant Sinopec SNP.N fell 3.06pc and 3.26pc respectively. Aluminium Corporation of China ACH.N dropped 3.14pc, while PetroChina PTR.N shed 2.85pc. Sinopec Shanghai Petrochemical Co SHI.N shed 3.54pc.
A spokesperson for NYSE declined to comment. A spokesperson for the Public Company Accounting Oversight Board, the audit watchdog overseen by the SEC, did not immediately provide comment.