Five of China's largest state-owned companies announced on Friday their withdrawal from the New York Stock Exchange, amid a row over financial audits of their activities.
Among these companies, "Sinopec" and "PetroChina", one of the largest oil groups in China and the world, and said that they will apply for a voluntary withdrawal from the US stock market.
Similar announcements were made by the Chinese aluminum company Chalco, China Life Insurance and a branch of Sinopec based in Shanghai.
The shares of these five companies will remain listed on the Chinese Stock Exchange and the Hong Kong Stock Exchange.
China and the United States have been at odds for two decades over allowing US inspectors to access the papers that allow audits of Chinese companies' businesses.
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Mainland China and Hong Kong companies are notorious for not submitting their financial statements to auditors approved by US authorities.
A law passed in 2020 by the US Congress requires any company listed in the United States to have its accounts approved by a company accredited by the Independent Accountability Organization.
In the event of non-compliance with the legislation, companies face the risk of canceling their registration as of 2024. In this context, the five companies announced their withdrawal decision.
The companies justified their decision by the cost associated with maintaining the registration in the United States as well as the burden of complying with audit obligations.
The five groups are on the list of companies ordered by the US Market Control Authority to comply with imposed accounting obligations and were essentially threatened with expulsion from the New York Stock Exchange, and this list includes other Chinese companies such as Alibaba.
“These state-owned companies are located in strategic sectors and are seen as having access to information and data that the Chinese government may be reluctant to give access to foreign regulators,” Redmond Wong, strategic analyst at Saxo Markets, told Bloomberg. ".
According to "Bloomberg", about 300 companies based in China and Hong Kong - with a market value of more than 2.4 trillion dollars" risk being expelled from US stock exchanges as the Securities and Exchange Commission tightens its audits on companies.
It is noteworthy that PetroChina was listed on the American Stock Exchange in 2000, with a market capitalization of 135 billion dollars, "China Life" in 2003, with a market capitalization of 98 billion dollars, and "Sinopec Corp" in 2000, with a market value of 71 billion dollars. and "Chalco" in 2001, with a market value of 10.6 billion dollars, and "Shanghai Sinopec" in 1993, with a market value of 3.9 billion dollars.