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Five major Chinese companies delisted from the NYSE – The New Indian Express

By AFP

BEIJING (Reuters) – Five major Chinese companies, including two of the country’s biggest oil producers, will be delisted from the New York Stock Exchange, the companies said in filings on Friday.

Sinopec and PetroChina – two of the world’s largest energy companies – will seek “voluntary delisting” of their US depository shares, the companies said in separate statements.

The Aluminum Corporation of China, also known as Chalco, along with China Life Insurance and a Shanghai-based subsidiary of Sinopec, announced similar moves.

The delisting plans come as tensions between Beijing and Washington rise over US House Speaker Nancy Pelosi’s visit last week to Taiwan, which China claims is its territory.

Beijing has raged against the visit, holding unprecedented military drills around the self-governing island and suspending cooperation with the United States on issues ranging from climate change to cracking down on drug traffickers.

The five companies are on a list of firms published by the U.S. Securities and Exchange Commission that faced delisting from Wall Street if they failed to comply with new audit requirements.

The five companies said in separate statements that they expect to cease trading on the NYSE in early September.

The new requirements came into effect late last year, at a time when Chinese authorities were expressing reservations about registering Chinese-based companies in the United States.

READ ALSO | US cannot allow China’s ‘new normal’ to pressure Taiwan with military drills, says Pelosi

On Friday, the five companies all pointed to the costs of maintaining U.S. listings as well as the burden of complying with reporting obligations as factors behind the decision.

China’s securities regulator said on Friday that the decisions were made by the companies “for their own business considerations.”

The write-offs “will not affect companies’ continued use of domestic and foreign capital markets for financing and development,” the regulator said in a statement.

Reimbursement fears

The 2020 US Congress passed legislation specifically targeting Chinese companies under which the Public Company Accounting Oversight Board (PCAOB) must be able to inspect the audits of foreign companies listed on US markets.

Companies in mainland China and Hong Kong are notorious for not submitting their financial statements to US-certified auditors.

The law therefore puts them at risk of delisting, and its implementation comes at a time when Chinese authorities have in recent months expressed reservations about the listing of Chinese-based companies in the United States.

Chinese e-commerce giant Alibaba is among the latest group of companies added to the list of more than 250 companies at risk of being delisted under the rules.

READ ALSO | Alibaba struggles to maintain U.S. listing despite delisting fears

The market heavyweight saw its Hong Kong shares sink earlier this month after it was listed, dragging the Hang Seng Tech index down with it.

By exiting the U.S. market, Chinese companies are giving up an investor base unique in the world – with $52.5 trillion in assets under management, compared to $7.1 trillion in China, according to a 2020 study by the consultancy McKinsey management and Company.

BEIJING (Reuters) – Five major Chinese companies, including two of the country’s biggest oil producers, will be delisted from the New York Stock Exchange, the companies said in filings on Friday. Sinopec and PetroChina – two of the world’s largest energy companies – will seek “voluntary delisting” of their US depository shares, the companies said in separate statements. The Aluminum Corporation of China, also known as Chalco, along with China Life Insurance and a Shanghai-based subsidiary of Sinopec, announced similar moves. The delisting plans come as tensions between Beijing and Washington rise over US House Speaker Nancy Pelosi’s visit last week to Taiwan, which China claims is its territory. Beijing has raged against the visit, holding unprecedented military drills around the self-governing island and suspending cooperation with the United States on issues ranging from climate change to cracking down on drug traffickers. The five companies are on a list of firms published by the U.S. Securities and Exchange Commission that faced delisting from Wall Street if they failed to comply with new audit requirements. The five companies said in separate statements that they expect to cease trading on the NYSE in early September. The new requirements came into effect late last year, at a time when Chinese authorities were expressing reservations about registering Chinese-based companies in the United States. READ ALSO | The United States cannot allow China’s “new normal” to pressure Taiwan with military exercises, says Pelosi. China’s securities regulator said on Friday that the decisions were made by the companies “for their own business considerations.” The write-offs “will not affect companies’ continued use of domestic and foreign capital markets for financing and development,” the regulator said in a statement. The 2020 US Congress passed legislation specifically targeting Chinese companies under which the Public Company Accounting Oversight Board (PCAOB) must be able to inspect the audits of foreign companies listed on US markets. Companies in mainland China and Hong Kong are notorious for not submitting their financial statements to US-certified auditors. The law therefore puts them at risk of delisting, and its implementation comes at a time when Chinese authorities have in recent months expressed reservations about the listing of Chinese-based companies in the United States. Chinese e-commerce giant Alibaba is among the latest group of companies added to the list of more than 250 companies at risk of being delisted under the rules. READ ALSO | Alibaba is struggling to maintain its US listing despite delisting fears The market heavyweight saw its Hong Kong shares sink earlier this month after it was listed, dragging the Hang index down with it Seng Tech. By exiting the U.S. market, Chinese companies are giving up an investor base unique in the world – with $52.5 trillion in assets under management, compared to $7.1 trillion in China, according to a 2020 study by the consultancy McKinsey management and Company.