On August 12, five Chinese state-owned enterprises, including China Life Insurance, Sinopec, PetroChina, Aluminium Corporation of China, and Sinopec Shanghai Petrochemical Company, announced that they had applied for a voluntary delisting of their American Depository Shares (ADSs) from the New York Stock Exchange.
China Life Insurance took the lead in announcing the decision. The final date for the company’s ADSs to be traded is expected to be September 1, 2022 or later. At the same time, the company announced that during the period from January 1 to July 31, 2022, the accumulated original insurance premium income was about 469.6 billion yuan ($69.65 billion).
Oil giant Sinopec said that it plans to submit a 25-form to the US SEC on or around August 29, 2022 to delist its ADSs from the NYSE, and the delisting is expected to take effect ten days after the 25-form submission. The last trading date of PetroChina’s ADSs on NYSE is on or around September 8, 2022. Aluminium Corporation of China, and Sinopec Shanghai Petrochemical Company which is directly supervised and controlled by Sinopec, are also expected to withdraw from the stock exchange in September.
The announcements of the five companies also indicated the reasons for delisting, including the limited trading volume of the companies’ ADSs compared with the global trading volume of the H shares, and the greater administrative burden and costs involved in maintaining their listings on the NYSE, such as regular reporting and relevant duties.
In response, the China Securities Regulatory Commission said that listings and delistings are a normal occurrence in capital markets. According to the announcements of the aforementioned enterprises, they have strictly abided by the rules and regulatory requirements of the US capital markets since listing in the US, and made the delisting choice out of their own commercial considerations. These enterprises are listed on many stock exchanges and the proportion of securities listed in the US is very small. The current delisting plan will not affect the enterprises’ continued use of domestic and overseas capital markets for development.
People familiar with the matter told Pandaily that negotiations on audit papers between China and the Public Company Accounting Oversight Board (PCAOB) of the United States are underway, and it is expected that there will be results within this year. Due to the sensitivity of energy industries and state-owned enterprises, it is impossible to hand over audit papers, so delisting from the NYSE is inevitable.