Over 80 Chinese Companies Including JD.com and NetEase Face Threat of US Delisting

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Several dozen Chinese companies face the prospect of delisting from US bourses, including online giants JD.com and NetEase.

The US Securities and Exchange Commission (SEC) announced last Wednesday that it had added over 80 Chinese firms to a list of entities that could be spelled from American exchanges, following unresolved disagreements between the US and China in relation to auditing standards.

Chinese companies added to the list included Bilibili, China Petroleum & Chemical, NetEase, JD.com, and JinkoSolar.

SEC said that the Holding Foreign Companies Accountable Act (HFCAA) permits to it to remove foreign-jurisdiction companies from US exchanges should they fail to satisfy auditing standards for three consecutive years.

Beijing has refused to provide US regulators with full access to the audit working papers of a number of Chinese companies listed in New York, on the grounds that doing so would compromise China’s national security.

The two countries are working on the details of an auditing agreement, with Chinese authorities expecting to sign a deal in 2022.

Reports emerged in March that Chinese authorities had requested that US-listed Chinese companies including Alibaba, Baidu and JD.com to ready themselves for more auditing disclosures.