Alibaba wants to work with US regulators on audit problems
Alibaba has faced growth challenges amid regulatory tightening on China’s domestic technology sector and a slowdown in the world’s second-largest economy. But analysts believe that the e-commerce giant’s growth may take off for the rest of 2022.
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Chinese e-commerce giant Alibaba said it would comply with US regulators and work to maintain its listings in New York and Hong Kong.
“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and endeavor to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” it said in a statement to the Hong Kong Exchange on Monday.
The statement came after Alibaba was included on the US Securities and Exchange Commission’s list of Chinese companies on Friday for not meeting auditing requirements. As a result, shares of US-listed Alibaba fell 11% in Friday’s trading session.
On Monday, stocks in Hong Kong were down more than 5% but recovered to trade around 2.2% by noon.
Under the Holding Foreign Companies Accountable Act law, the SEC identifies public companies that have retained a registered public accounting firm to issue an audit report where the firm has a branch or office.
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On Monday, Alibaba said it had been added to the SEC’s list, indicating that its audit for the fiscal year ended March 31, 2022 may not be fully reviewed by the US Public Company Accounting Oversight Board.
Under the HFCAA, if the PCAOB cannot fully oversee the audit of a US-listed company’s financial statements for three consecutive “non-inspection” years, the SEC is required to bar the company’s securities from being traded on US markets. Is.
Last week, the Chinese tech giant said it would apply for a dual primary listing in Hong Kong. Shares of the tech giant are already traded on both the US and Hong Kong exchanges, but the current listing in Hong Kong is a secondary one.
The primary listing process in Hong Kong is expected to be completed before the end of 2022, the company said in a statement.
— CNBC’s Abigail Ng contributed to this report