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Chinese e-commerce firm Alibaba (NYSE: BABA) said Monday that it wants to keep its shares listed in both New York and Hong Kong, days after U.S. regulators included it in a list of companies that may be delisted for not complying with auditing requirements.
Auditing process
The U.S. Securities and Exchange Commission has said foreign companies face having their shares delisted if they don't give American regulators access to their financial statements and
auditing process as required of other companies around the world.
The addition of Alibaba to the listis the latest blow as it suffers the fallout from Beijing's regulatory
crackdown on the technology industry, according to an AP report.
Alibaba's inclusion among the
companies potentially facing delisting follows its announcement last week that
it wants to pursue a primary listing in Hong Kong, where it now has a secondary
listing. That move would enable Alibaba to tap a wider base of investors,
including those in mainland China, the AP report said.
‘Non-inspection year’ claim
"Alibaba will continue to
monitor market developments, comply with applicable laws and regulations andstrive to maintain its listing status on both the NYSE and the Hong Kong Stock
Exchange," the company said in an announcement filed to the Hong Kong
stock exchange Monday.
The company said that the fiscal
year that ended March 31, 2022 was its first "non-inspection" year
under regulations that say a company that goes three years without complying
with audit requirements will be forced to delist.
Alibaba's Hong Kong stock price
plunged 3.76% in Hong Kong on Monday, closing at 89.60 Hong Kong dollars.
The move by the SEC to include
Alibaba for possible delisting could be in retaliation for its plans to seek
the primary listing in Hong Kong, said Francis Lun, an investment manager and a
veteran market commentator.
Alibaba is one of the most
heavily-traded Chinese companies in the U.S.
"If you look at the stock
price, investors are very pessimistic (about Alibaba)," Lun said.
Alibaba's New York-listed stock is down over 55% over the last 12 months.
Anti-monopoly violations
Alibaba was fined a record $2.8
billion for anti-monopoly violations, and regulators scrutinized its financial
affiliate Ant Financial closely after Ant was ordered to halt its initialpublic listing days before it was due to go public.
The primary listing in Hong Kong is
expected to be completed by the end of this year.
Alibaba first went public in New
York in September 2014 in what was then the world's biggest initial public
offering at $25 billion. It completed a secondary listing in Hong Kong in
November 2019.
Other Chinese firms seeking a
primary listing in Hong Kong include cloud computing service provider Kingsoft
Cloud Holdings and video sharing site Bilibili Inc.
AP
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