The United States is reviewing Chinese companies listed in the United States! Are Alibaba and JD facing the risk of delisting?

It is learned that according to Reuters, starting next month, the US regulator (PCAOB) will conduct audit inspections on Chinese companies listed in the United States, including Alibaba and JD.com.

For more than a decade, U.S. regulators have sought access to audit documents of Chinese companies listed in the United States, but Chinese authorities have been reluctant to let U.S. regulators review Chinese accounting firms, citing concerns about national security.

But this year, in late August, the PCAOB and the China Securities Regulatory Commission signed a cooperation agreement allowing the U.S. regulator to review accounting firms in mainland China and Hong Kong.

Political and legal developments in the United States over the past two years have accelerated the threat that Chinese companies may need to be delisted from U.S. stock exchanges. In July, Alibaba was included by the U.S. Securities and Exchange Commission (SEC) on a list of Chinese companies that could be delisted for failing to comply with audit requirements.

The list now has more than 160 Chinese companies, including JD.com, Yum China and electric car maker NIO. Current U.S. law stipulates that Chinese companies that fail to comply with audit work requirements will be suspended from trading in the United States in early 2024.

The people added that accounting firms PricewaterhouseCoopers, Deloitte and KPMG, respectively, of Alibaba, JD.com and Yum China, have also been notified of the inspections. Alibaba, JD.com, Yum China and the China Securities Regulatory Commission did not respond to requests for comment.

The PCAOB said on Friday it had notified the selected firms, without naming them, and expected its officials to arrive in Hong Kong in mid-September to conduct the inspections. The PCAOB also said it selects firms based on risk factors such as size and industry, and that no firm can expect special treatment.

It could not immediately be determined how many and which Chinese companies were included in the first round of U.S. inspections.

Alibaba's U.S.-listed shares closed down nearly 3% on Tuesday after the Reuters report, and were up about 1% in premarket trading. Its Hong Kong shares closed down 1% on Wednesday, after plunging more than 3% in early trading.

Days before being added to the U.S. delisting list, Alibaba said it planned to add a primary listing in Hong Kong to its New York business, targeting investors in mainland China.

Editor✎ Ashley/

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