China’s Alibaba aims to keep New York listing amid audit dispute

The Alibaba Group logo for is seen on the trading floor of the New York Stock Exchange in Manhattan, New York City, US, Aug. 3, 2021. REUTERS/Andrew Kelly/File Photo

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Aug 1 (Reuters) – Alibaba Group Holding Ltd (9988.HK) said Monday it would work to maintain its listing on the New York Stock Exchange alongside its Hong Kong listing after the Chinese e-commerce giant was banned by US authorities from list of removal lists was posted .

Alibaba shares fell 4.5% in a near-flat Hong Kong (.HSI) market in early trading, after falling 11.1% in New York on Friday.

The company Friday became the last of more than 270 companies added to the U.S. Securities and Exchange Commission’s list of Chinese companies that may be delisted for failing to meet audit requirements. read more

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The Holding Foreign Companies Accountable Act (HFCAA) aims to address a long-running dispute over audit compliance by US-listed Chinese companies.

It aims to remove foreign companies from US exchanges if they fail to meet US auditing standards for three consecutive years.

Alibaba said Monday the addition to the list meant it was now in its first ‘non-inspection’ year.

“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing on both the NYSE 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’ auditing documents, which are stored in China.

Beijing bans foreign inspection of working documents from local audit firms.

The US rules give Chinese companies until early 2024 to comply with audit requirements, though Congress is considering bipartisan legislation that could accelerate the deadline to 2023.

China has said both sides are determined to reach a deal to resolve the audit dispute.

Alibaba said last week it plans to file an application to convert its secondary listing in Hong Kong to a dual primary listing, which would make it easier for mainland Chinese investors to buy shares. read more

A dual listing would allow Alibaba to apply for admission to Stock Connect, the arrangement that links Hong Kong and the mainland. Analysts estimate that there could be $21 billion in inflows from mainland investors into Alibaba stock through Stock Connect.

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Alibaba’s Hong Kong-listed shares are down 49% from HK$176 at the time of secondary listing in November 2019 to HK$90.15 on Monday. In New York, the shares were listed at $68 each in 2014 and are trading at $89.37.

Both sets of publicly traded stocks are down nearly 25% so far this year as the company battles the threat of delisting, ongoing Chinese tech regulations and the prospect of founder Jack Maceda taking control of the company’s affiliate. Ant Group takes over.

Jefferies analysts described Alibaba’s fall as a “knee-shock reaction” to news of a potential delisting, adding that the 2024 deadline for the delisting of Chinese American Depository Receipt gives China plenty of time to deal with its control issues. to solve.

“China is serious about resolving control 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.

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