‘Looks like something big is going to happen later.’
Chinese-owned companies listed on the U.S. exchange have been asked by government regulators to provide audit disclosures, as Beijing is stepping up efforts to ensure domestic companies remain on the listing.
According to sources, Chinese regulators are considering a proposal to allow their counterparts in the U.S. to conduct audit paper inspections of Chinese companies that have not previously conducted sensitive data collection.
As a result, the China Securities Regulatory Commission (CSRC) as well as several other regulatory agencies have called on internet giants to prepare audit documents for financial year 2021 that meet the demands of US regulators.
Among the Chinese companies involved are:
Search engine company Baidu Inc.
E-commerce giant JD.com.
Pinduoduo Inc. e-retail company.
Game company NetEase Inc
Alibaba Group and Weibo Corp.
So far no further statements have been issued by the companies.
Meanwhile, the Chinese regulator's efforts showed its willingness to make several concessions to resolve the China-US audit deadlock, which has disrupted hundreds of billions of dollars of US investment in Chinese companies.
In connection with the matter, the US authorities may act by delisting Chinese companies from the US exchange, if the audit records are not available for inspection within 3 days.
For the record, the U.S. Securities Exchange Commission (SEC) has identified a total of 273 Chinese companies at risk for delisting under the Holding Foreign Companies Accountable Act (HFCAA).
Among the Chinese -owned companies identified were KFC operator, Yum China Holdings and biotech firm, BeiGene Ltd.
The CSRC stated that the SEC’s action was ‘normal procedure’ and expressed confidence that an agreement would be reached among its counterparts in the US in resolving the dispute.
