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SEC Adds Alibaba to List of Companies Facing Delisting

Move comes as talks to resolve the two-decades old dispute fail to deliver results and SEC continues adding names of non-compliant companies.

Alibaba logo
Poor market conditions have killed Alibaba's plan to split into six units. The group now says it will buy the 36% of shares it does not own in its Cainiao logistics unit. This image shows the tech giant's head office in Beijing (Reuters).

The US SEC on Friday added Alibaba Group Holding Ltd to a list of Chinese companies that could face delisting from US exchanges, pushing the e-commerce juggernaut’s shares down about 9% in mid-day trading.

Alibaba is one of more than 270 Chinese companies listed in the US that face delisting under the Holding Foreign Companies Accountable Act (HFCAA), designed to compel the SEC commissioner to take action against companies that continue to ignore audit rules set out in the 2002 Sarbanes-Oxley Act.

Following Sarbanes-Oxley, all non-US companies listed in the US either took steps to comply with the new rules or voluntarily left. Chinese companies did neither, compelling US Congress to pass a law that requires the SEC to delist non-compliant companies after nearly two decades of Chinese companies’ flouting the rules.

The prior rule said the SEC could take action, but it never did. The new law requires the SEC to delist.


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Other big names already on the list include KFC operator Yum China Holdings, biotech firm BeiGene Ltd, Weibo Corp and JD.Com.

On Wednesday, the SEC Chair Gary Gensler said he would not send public accounting inspectors to China or Hong Kong unless there is an agreement on complete audit access.

Gensler stated the Public Company Accounting Oversight Board, which was created as part of Sarbanes-Oxley to oversees audits of US-listed companies, would need to be able to bring “specificity and accountability” in audits.

Alibaba has until August 19 to submit evidence disputing identification, the SEC said.

Others added to the list on Friday include Mogu Inc, Boqii Holding Limited, Cheetah Mobile Inc and Highway Holdings Limited.


  • Reuters, with editing by Neal McGrath



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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.


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