WebProNews

Tag: HFCAA

  • Chinese Companies Turning to Hong Kong Amid NYSE Delisting Threat

    Chinese Companies Turning to Hong Kong Amid NYSE Delisting Threat

    Chinese companies are increasingly looking to the Hong Kong Exchanges as the threat of delisting from the NYSE grows.

    Amid growing tensions between the US and China, US regulators are more aggressively scrutinizing Chinese companies. More than 100 companies have been put on the 2020 Holding Foreign Companies Accountable Act (HFCAA) list, opening the door to their eventual removal from the NYSE if they fail to become compliant.

    According to Business Insider, Kingsoft Cloud Holdings is the latest Chinese company looking to the Hong Kong Exchanges after being placed on the HFCAA list. The company, and others like it, see Hong Kong as a way to stay out of the US-China fray.

    At the same time, moving to Hong Kong doesn’t automatically fix a company’s underlying issues. As Insider points out, Kingsoft has a number of challenges, including a tech crackdown by China, being reliant on too few large customers, and being a small player in the larger Chinese cloud market.

    For companies with good financials and a solid business plan, however, Hong Kong may end up being the safe haven they’re looking for.

  • Alibaba Runs Afoul of Regulators, Could Face Delisting From NYSE

    Alibaba Runs Afoul of Regulators, Could Face Delisting From NYSE

    The US has added Alibaba to a list of companies that could face delisting from the NYSE over audit concerns.

    The US has been cracking down on Chinese firms, especially those whose finances cannot be properly audited. Alibaba is the latest to run afoul of US regulators, according to The Register, and is now on the 2020 Holding Foreign Companies Accountable Act (HFCAA) list.

    As the report goes on to highlight, being on the HFCAA list doesn’t automatically lead to delisting. Alibaba’s addition to the list merely means it had its first “non-inspection” year. For delisting to occur, the company would need to file two more consecutive annual reports that are not compliant.

    Alibaba issued the following statement to the SEC:

    Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange.

  • Baidu Warned it May Be Delisted Over Audit Concerns

    Baidu Warned it May Be Delisted Over Audit Concerns

    Chinese search giant Baidu has been warned it may be delisted as a result of audit concerns.

    Baidu is the dominant search engine in China, and is currently listed on the Nasdaq. Unfortunately for Baidu, its listing is in jeopardy, with the Securities and Exchange Commission (SEC) putting the company on a provisional list of companies that face delisting under the Holding Foreign Companies Accountable Act (HFCAA).

    Companies are put on the provisional list when “the Public Company Accounting Oversight Board (“PCAOB”) has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction.”

    Once a company is put on the provisional list, it has 15 business days to contact the SEC staff and provide evidence to support why it should not be delisted. In the case of Baidu, the deadline is April 20, 2022.

    Should Baidu fail to appeal its placement on the provisional list, or fail to convince the SEC it should remain on the Nasdaq, its delisting will likely exacerbate the US/China trade issues.