The Chinese tech MNC, Alibaba Group Holding Limited (NYSE: BABA), announced Monday that it would fight to keep its Hong Kong and New York Stock Exchange (NYSE) listings. As a result, the company was placed on the United States authorities’ delisting watchlist.
On Friday, the Hangzhou-based e-commerce giant was added to the United States federal independent government agency, the Securities and Exchange Commission, or the SEC’s list of China-based enterprises that could be delisted for failing to comply with the auditing rules, adding to a list that already has over 270 other companies. The Alibaba Group made a statement saying that by being included on the watchlist, it is at present regarded as having entered its very 1st non-inspection year.
The Holding Foreign Companies Accountable Act (HFCAA) aims to resolve a long-standing disagreement on the auditing compliance of China-based firms in the United States. If overseas enterprises do not adhere to the auditing criteria of the United States for three years in a row, it seeks to delist them from the country’s (USA) exchanges.
Alibaba Group Holding Limited made a statement to the Hong Kong Stock Exchange saying that it will carry on watching market trends, act by the applicable rules and regulations, as well as try to safeguard its listing on both the New York Stock Exchange (NYSE) and the Stock Exchange of Hong Kong.
The audit working documents of China-based enterprises listed on the New York Stock Exchange (NYSE) that are kept in the People’s Republic of China have come under intense pressure from United States officials demanding to inspect them. However, China’s capital, Beijing, forbids foreign authorities from examining the working documents of regional accounting businesses.
Also Read: J.D.com, Alibaba promote a shift to the Hong Kong market
The time limit for China-based corporations to adhere to the auditing obligations under United States regulations is 2024. However, Congress is considering bipartisan legislation, which may shorten the time to 2023. The People’s Republic of China has stated that all parties are dedicated to agreeing to resolve the audit dispute.