The Alibaba Group logo is seen on the trading floor of the New York Stock Exchange in Manhattan, New York, U.S., August 3, 2021. REUTERS/Andrew Kelly/File Photo
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Aug 1 (Reuters) – Alibaba Group Holding Ltd ( 9988.HK ) said on Monday it will work to maintain its listing on the New York Stock Exchange alongside a listing in Hong Kong after the Chinese e-commerce giant was col ·placed on a watch list by US authorities. .
Alibaba shares fell 4.5 percent in an almost flat Hong Kong market ( .HSI ) in early trade, after falling 11.1 percent in New York on Friday.
The company on Friday became the latest of more than 270 companies to be added to the US Securities and Exchange Commission’s list of Chinese companies that could be delisted for failing to meet regulatory requirements. audit Read more
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The Holding Foreign Companies Accountable Act (HFCAA) aims to address a long-running dispute over the audit compliance of US-listed Chinese companies.
It aims to delist foreign companies from US stock exchanges if they fail to meet US auditing standards for three consecutive years.
Alibaba said on Monday that being added to the list meant it was now considered to be in its first year of “non-inspection”.
“Alibaba will continue to monitor market developments, comply with applicable laws and regulations, and strive to maintain its listing status on both the New York Stock Exchange and the Hong Kong Stock Exchange,” it said in a statement to the Hong Kong Stock Exchange.
US regulators have demanded full access to New York-listed Chinese companies’ audit working papers, which are stored in China.
Beijing prohibits foreign inspection of the working papers of local accounting firms.
US rules give Chinese companies until early 2024 to comply with audit requirements, although Congress is weighing bipartisan legislation that could speed up the deadline to 2023.
China has said both sides are committed to reaching an agreement to resolve the audit dispute.
Alibaba said last week it planned to apply to convert its Hong Kong secondary listing into a dual main listing that would make it easier for mainland Chinese investors to buy its shares. Read more
A dual listing would allow Alibaba to apply for admission to Stock Connect, the scheme linking Hong Kong and mainland exchanges. Analysts estimated there could be inflows of $21 billion from mainland investors into Alibaba shares via Stock Connect.
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Hong Kong-listed Alibaba shares have fallen 49% from HK$176 at the time of their secondary listing in November 2019 to HK$90.15 on Monday. In New York, its shares traded in 2014 at $68 each and are trading at $89.37.
Both sets of listed shares are down nearly 25% so far this year as the company battles the threat of a delisting, ongoing Chinese tech regulation and the prospect that its founder Jack Ma cedes control of the company’s subsidiary Ant Group.
Analysts at Jefferies described the drop in Alibaba’s share price as a “knee-jerk reaction” to news of a potential delisting, adding that the 2024 deadline for delisting the depositary receipt American Chinese gives China enough time to resolve its audit issues.
“China is serious about resolving the audit issues with the US and talks will continue,” they wrote.
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Reporting by Scott Murdoch in Hong Kong and Josh Horwitz in Shanghai; Editing by Christopher Cushing
Our standards: the Thomson Reuters Trust Principles.