Chinese internet store company Alibaba may have to disappear from the New York Stock Exchange. The Securities and Exchange Commission has listed an Internet group of Chinese companies that do not comply with a two-year-old law for foreign companies listed in the United States.
Under a law introduced in 2020, the US regulator must have full access to information from accountants for foreign companies listed in the US. When companies from other countries open up, the government in Beijing prevents a US due diligence assessment in China.
In addition to Alibaba, there are more than 270 Chinese companies at risk of losing their listing on the New York Stock Exchange for the same reason. This includes the operator of fast food chain KFC in China, Yum China Holdings. Social media company Weibo and e-commerce company JD.com are also on the list.
After companies are listed as suspects by the SEC, it will take three years before they are effectively banned from New York stock exchanges. Alibaba has until August 19 to appeal the decision.
Securities and Exchange Commission Chairman Gary Gensler said it was particularly important that the US and Chinese governments reach agreement on full access to due diligence for listed companies. By verifying all of this information, the Securities and Exchange Commission can determine whether the quarterly and annual numbers of foreign companies listed on Wall Street are reliable.