(Finance) – Five of the largest Chinese state-owned companiesin a move not explicitly coordinated but implemented simultaneously, they announced their intention to withdraw their shares from US stock exchanges. It is about China Life Insurance, PetroChina, China Petroleum & Chemical, Aluminum of China And Sinopec Shanghai Petrochemical.
The announcement comes in a moment of tension between the US and Chinese authorities, who are trying to reach an agreement that would allow US regulators to inspect audits of Chinese companies. The China Securities Regulatory Commission said the delisting plans are based on the companies’ commercial concerns.
PetroChina quoted “the considerable administrative burden for the fulfillment of the disclosure obligations necessary to maintain the listing of the ADS on the NYSE, due to the differences in the rules between different listing venues “. The oil giant also stressed that”HKSE and SSE are viable alternatives for the company because they can meet the fundraising requirements necessary for its normal operations “, as well as” for better protection of the interests of investors “.
Sinopec, a petroleum and petrochemical group, said the choice was based on several considerations, including the limited trading volume of ADS compared to trading volume of ordinary shares and “the significant administrative burden of maintaining listing on the NYSE, registering ADS and underlying shares with the United States Securities and Exchange Commission, and long-term compliance with periodic reporting and related Exchange Act obligations.”
Approximately 200 Chinese companies are listed in the United States and face threats of delisting because US regulators are unable to verify their financial audits. Didi Global left the New York Stock Exchange in June, while Alibaba has stated in recent days that it will make the Hong Kong Stock Exchange its “primary listing”.
The US Congress has ruled that companies that do not meet the requirements must be delisted by 2024 transparency, and officials from the US and China are working to find a solution. Mainland China and Hong Kong lists are the only ones in the world that do not allow inspections by the Public Company Accounting Oversight Board.