Sign up now for FREE unlimited access to Reuters.com Register Aug 1 (Reuters) – Alibaba Group Holding Ltd ( 9988.HK ) said on Monday it would work to maintain its New York Stock Exchange listing alongside its Hong Kong listing after the Chinese e-commerce giant placed on Deletion Watchlist by US Authorities . Alibaba shares fell 4.5 percent in a mostly flat Hong Kong market ( .HSI ) in early trade, after falling 11.1 percent in New York on Friday. The company on Friday became the latest of more than 270 companies to be added to the US Securities and Exchange Commission’s list of Chinese companies that may be delisted for failing to meet audit requirements. read more Sign up now for FREE unlimited access to Reuters.com Register The Holding Foreign Companies Accountable Act (HFCAA) is intended to address a long-standing dispute over compliance with the control of US-listed Chinese companies. It aims to delist foreign companies from US exchanges if they fail to comply with US audit standards for three consecutive years. Alibaba on Monday said the listing meant it was now considered to be in its first year “without inspection”. “Alibaba will continue to monitor market developments, comply with applicable laws and regulations, and strive to maintain its listed status on both the NYSE and the Hong Kong Stock Exchange,” it said in a statement to its stock exchange. Hong Kong. US regulators are demanding full access to New York-listed Chinese companies’ audit working papers stored in China. Beijing prohibits foreign inspection of work documents by local accounting firms. U.S. rules give Chinese companies until early 2024 to comply with screening requirements, although Congress is considering bipartisan legislation that could accelerate the deadline to 2023. China has said both sides are committed to reaching an agreement to resolve the control dispute. Alibaba said last week it plans to apply to convert its secondary listing in Hong Kong into a dual primary listing, which would make it easier for mainland Chinese investors to buy its shares. read more A dual listing would allow Alibaba to apply to be listed on Stock Connect, the scheme that links the Hong Kong and mainland stock exchanges. Analysts estimated there could be $21 billion worth of inflows from mainland investors into Alibaba’s stock through Stock Connect. Alibaba’s Hong Kong-listed shares have fallen 49% from HK$176 during its secondary listing in November 2019 to HK$90.15 on Monday. In New York, its shares were listed in 2014 at $68 each and are trading at $89.37. Both sets of listed shares are down nearly 25% so far this year as the company battles the threat of a delisting, ongoing Chinese tech regulation and the prospect of founder Jack Ma ceding control of its subsidiary Ant Group. Analysts at Jefferies described the drop in Alibaba’s share price as a “knee-jerk reaction” to news of a possible write-off, adding that the 2024 deadline to write off Chinese US depository receipts gives China sufficient time to resolve the control issues. “China is serious about resolving control issues with the US and talks will continue,” they wrote. Sign up now for FREE unlimited access to Reuters.com Register Reporting by Scott Murdoch in Hong Kong and Josh Horwitz in Shanghai. Editor: Christopher Cushing Our Standards: The Thomson Reuters Trust Principles.
