SHANGHAI/HONG KONG, Aug 12 (Portal) – Five Chinese state-owned companies including China Life Insurance (601628.SS) and oil giant Sinopec (600028.SS) said on Friday they would withdraw their listing from the New York Stock Exchange amid increased diplomacy take and economic tensions with the United States.
The companies, which also include Aluminum Corporation of China (Chalco) (601600.SS), PetroChina (601857.SS) and Sinopec Shanghai Petrochemical Co (600688.SS), said in separate statements that they are delisting their American Depository would apply for shares from later this month.
The five companies, which were added to the Holding Foreign Companies Accountable Act (HFCAA) list in May after they were found not to meet US regulators’ auditing standards, will retain their listings in Hong Kong and mainland China.
Separate statements by Chinese companies detailing their moves, which came amid heightened tensions after US House Speaker Nancy Pelosi’s visit to Taiwan last week, made no mention of the audit dispute.
Beijing and Washington have held talks to resolve a long-standing dispute that could see Chinese firms delisted from US stock exchanges if they fail to comply with US auditing rules.
“These companies have strictly followed the rules and regulatory requirements of the US capital market since their listing in the US, and made the decision to delist based on their own business considerations,” the China Securities Regulatory Commission (CSRC) said in a statement.
Some of China’s largest companies, including Alibaba Group Holdings, JD Com Inc and Baidu Inc, are among nearly 270 on the list and are threatened with delisting.
Alibaba said last week it would convert its Hong Kong secondary listing to a dual primary listing, which analysts say could ease the way for the Chinese e-commerce giant to switch primary listings in the future. Continue reading
In premarket trading on Friday, US-listed shares in China Life Insurance and oil giant Sinopec fell 5.7% and 4.3%, respectively. Aluminum Corporation of China lost 1.7% while PetroChina lost 4.3%. Sinopec Shanghai Petrochemical Co lost 4.1%.
“China is sending a message that its patience is waning in exam talks,” said Kai Zhan, senior counsel at Chinese law firm Yuanda, which specializes in areas including US capital markets and US sanctions compliance.
Washington has long demanded full access to the books of US-listed Chinese companies, but Beijing has banned foreign access to audit documents from local accounting firms, citing national security concerns.
The companies said their US trading volume is small compared to their other major listings.
PetroChina said it has never raised follow-on capital from its US listing and its Hong Kong and Shanghai bases “can meet the company’s fundraising needs” as well as “better protect investors’ interests.”
China Life and Chalco said they would file a delisting application on August 22, which will take effect 10 days later. Sinopec and PetroChina said their applications would be made on August 29.
China Telecom (0728.HK), China Mobile (0941.HK) and China Unicom (0762.HK) were delisted from the United States in 2021 after Trump-era decisions to restrict investment in Chinese tech companies. That ruling was left unchanged by the Biden administration amid ongoing tensions.
Reporting by Samuel Shen in Shanghai, Scott Murdoch in Hong Kong and Medha Singh in Bengaluru; Editing by Hugh Lawson, David Goodman and Alexander Smith
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