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Alibaba
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Alibaba added to watch list of Chinese firms facing expulsion from US exchanges, days after primary listing bid in Hong Kong

  • The US Securities and Exchange Commission on Friday put Alibaba on its watch list of Chinese firms that face removal from American exchanges
  • More than 150 Chinese companies are currently on the SEC’s provisional line-up of firms up for delisting

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Alibaba Group Holding, which raised US$25 billion from its initial public offering in 2014, could end up being the biggest Chinese firm to be delisted in the US if it does not meet the country’s audit requirements. Photo: Shutterstock
Iris Deng
Alibaba Group Holding has been added to a growing list of Chinese companies that face potential delisting from US stock exchanges, days after the e-commerce giant announced plans to seek a primary listing on Hong Kong’s bourse with the aim to diversify its investor base.
The US Securities and Exchange Commission (SEC) on Friday included Alibaba, owner of the South China Morning Post, to its watch list of US-listed Chinese firms that face removal from American exchanges under a 2020 law, the Holding Foreign Companies Accountable Act (HFCAA).

Under that law, foreign companies may be delisted if they fail to submit their audit papers to a US accounting oversight body for three consecutive years. This means the three-year countdown for Alibaba to comply with the requirement has started.

Alibaba could end up being the biggest Chinese firm to be delisted in the US if it does not meet that legal requirement. The Hangzhou-based company did not immediately respond to a request for comment on Saturday.
Visitors are seen outside the New York Stock Exchange building on September 19, 2014, when the Chinese e-commerce giant started its first day of trading after raising US$25 billion from its initial public offering. Photo: Shutterstock
Visitors are seen outside the New York Stock Exchange building on September 19, 2014, when the Chinese e-commerce giant started its first day of trading after raising US$25 billion from its initial public offering. Photo: Shutterstock

The SEC’s move sent Alibaba’s American depositary shares down 11 per cent on Friday to close at US$89.37. The company has lost nearly two-thirds of its valuation since its peak in late 2020 amid regulatory pressures in both China and the US, and a weakening global macroeconomic environment.

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