The United States Securities and Exchange Commission (SEC) added more than 80 Chinese companies to a delisting watchlist on Wednesday, including JD.com, Bilibili and Pinduoduo, because it was unable to check the firms’ audit working papers.
The newly named entities also include well-known companies from various industries, such as Huaneng Power International, Inc., 36Kr Holdings Inc., Tencent Music Entertainment Group, Trip.com Group Ltd., XPeng Motors, China Mobile, NetEase, NIO, China National Petroleum Corporation, and Sinovac Biotech.
Since March, many China Concepts Stock companies have been added to a pre-delisting list, including iQiyi, Li Auto, Best Inc., KE Holdings, and others. The recent batch has increased the number of Chinese companies on the list to 105. As the deadline for appeals has passed, the third batch of five companies, including Futu Holdings Ltd., Nocera, iQiyi, Baidu and CASI Pharmaceuticals, Inc., have now been moved to the “determined delisting list” from the “pre-delisting list.”
According to the Holding Foreign Companies Accountable Act (HFCAA) passed in the U.S. in 2020, foreign firms listed in the country may be forced to delist if they fail to have their audit working papers inspected by regulators for three consecutive years.
At the end of March, the head of the International Department of China Securities Regulatory Commission met with press, issuing the following response: As for some enterprises listed by the SEC as being at risk of delisting, we understand from SEC that this is a normal procedure for U.S. regulators to enforce the HFCAA, and whether the listed companies will really be delisted in the next two years ultimately depends on the progress and results of China-U.S. audit supervision cooperation.