Alibaba Group Holding Ltd said on Wednesday it would work to keep trading its shares in the United States and Hong Kong after being added to the U.S. Securities and Exchange Commission’s list of companies at risk of being delisted over disclosure deficiencies, Reuters reported. Shares of the Chinese e-commerce giant have fallen 6 percent since it was added to the SEC’s quarterly list on Tuesday. Alibaba has six months to either make its disclosures public or face possible delisting from the Nasdaq exchange in the United States and from the stock exchange in Hong Kong, where trading will remain uninterrupted until any potential delisting announcement.
Chinese e-commerce conglomerate Alibaba
Alibaba, a Chinese e-commerce conglomerate, stated that it will cooperate with American regulators and maintain its listing in New York and Hong Kong. Alibaba will continue to monitor market developments, abide by all relevant laws and regulations, and aim to keep its current listing status with both the NYSE and the Hong Kong Stock Exchange, it said in a statement to the Hong Kong bourse on A statement from Alibaba came after it was added to the SEC’s list of Chinese companies that could be delisted for failing to meet auditing requirements on Friday. The U.S.-listed shares of Alibaba plunged 11% as a result. Hong Kong’s stock fell more than 5% on Monday but recovered to trade at around 2.2% by midafternoon.
It is required by The Holding Foreign Companies Accountable Act That
The Holding Foreign Companies Accountable Act requires the SEC to identify public companies that retain a registered public accounting firm to provide an audit report where the firm has a branch or office. According to the U.S. Securities and Exchange Commission, Alibaba’s audits for the fiscal year ending March 31, 2022, cannot be properly assessed by the U.S. Public Company Accounting Oversight Board. Per the HFCAA, if the PCAOB is unable to fully inspect an audit of a company’s financial statements for three consecutive years, the SEC must bar the company’s securities from being traded on U.S. markets. Just last week, the Chinese tech giant announced that it plans to apply for a dual primary listing in Hong Kong. The tech giant is already traded on both the United States and Hong Kong exchanges, but its listing in Hong Kong is the second priority. Its first priority listing in Hong Kong should be complete by the end of 2022, the company claims in a statement.