Chinese internet portal Sohu seeks delisting from Nasdaq after being named by US regulator as non-compliant with audit rules
- The announcement came after the US Securities and Exchange Commission added Sohu, to a list of stocks facing potential delisting
- A total of 23 companies, including Baidu and Weibo, have been identified by the SEC as being at risk of delisting for non-compliance with audit rules
Internet portal operator Sohu.com, one of the first Chinese tech firms to list on Nasdaq in 2000, said it is looking to exit the US exchange, signalling that the company is not confident about meeting strict auditing requirements.
The announcement on Wednesday came after the US Securities and Exchange Commission (SEC) on Tuesday added 12 more Chinese companies, including Sohu, to a list of stocks that face a potential delisting for failing to comply with US auditing oversight law.
The Holding Foreign Companies Accountable Act (HFCAA), which came into effect in late 2020, requires US-listed foreign firms to comply with audit inspection rules under the Public Companies Accounting Oversight Board (PCAOB), or face the risk of being delisted from US stock exchanges after three consecutive years of non-compliance.
A total of 23 companies, including Chinese search engine giant Baidu and social media platform Weibo, have been identified by the SEC as being at risk of forced delisting for failing to comply with HFCAA as of March this year.
In Sohu’s statement to the SEC, the company said its identification under the HFCAA was expected after the company filed its 2021 annual report last month.
“The registrant does not plan to dispute the SEC’s provisional identification,” Sohu said, adding that it has been exploring “alternative courses of action” in view of a possible delisting from Nasdaq. It noted that a delisting or alternatives might have an “adverse effect” on the company’s market value.
Sohu did not immediately reply to a request for comment on Thursday.