Alibaba seeks to work with US regulators over audit issues

Alibaba has faced growth challenges amid tightening regulation of China’s domestic technology sector and a slowdown in the world’s second-largest economy. But analysts think the e-commerce giant’s growth could pick up in the rest of 2022.

Kuang Da | Jiemian News | VCG | Getty Images

Chinese e-commerce giant Alibaba said it will 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 strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” it said in a statement to the stock exchange on Monday. Hong Kong.

The statement came after Alibaba was added to the US Securities and Exchange Commission’s list of Chinese companies at risk of delisting for failing to meet audit requirements on Friday. As a result, Alibaba’s U.S.-listed shares fell 11% in Friday’s trading session.

Shares fell more than 5% in Hong Kong on Monday, but recovered to trade around 2.2% by mid-afternoon.

under the Liability law of foreign companies Act, the SEC identifies public companies that have engaged a registered public accounting firm to issue an audit report when the company has a branch or office.

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On Monday, Alibaba said it was added to the SEC’s list, indicating that its audits for the fiscal year ending March 31, 2022 could not be fully reviewed by the Company’s Accounting Oversight Board US Public.

Under the HFCAA, if the PCAOB fails to fully inspect the audits of the financial statements of a publicly traded company in the United States for three consecutive years of “non-inspection,” the SEC is required to prohibit the securities of the company are listed on the US markets.

Last week, the Chinese tech giant said it will file for a dual primary listing in Hong Kong. The tech giant’s shares are already listed on the US and Hong Kong stock exchanges, but the current listing in Hong Kong is secondary.

The main 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


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!