Alibaba added to US SEC delisting watchlist, shares fall

BENGALURU (July 29): Alibaba Group Holding Ltd on Friday (July 29) became the latest company to be added to the U.S. Securities and Exchange Commission’s (SEC) list of Chinese companies that could be delisted.

Shares of Alibaba fell 11% to US$89.37 (about RM397.74) at the closing bell, ending the month down 21.4%. Shares of the e-commerce giant were already feeling the pressure, after reports suggested Jack Ma was planning to cede control of fintech firm Ant, a subsidiary of Alibaba.

Alibaba is among more than 270 New York-listed Chinese companies identified as at risk of being delisted under the Foreign Company Liability Act, intended to settle a long-running compliance dispute. audit of Chinese companies listed in the United States.

US regulators have demanded full access to audit working papers of New York-listed Chinese companies, which are stored in China.

As Washington and Beijing hold talks over the dispute, KFC operator Yum China Holdings, biotech firm BeiGene Ltd, Weibo Corp and JD.Com are among the companies that could face delisting.

Alibaba’s IPO in 2014 was the biggest IPO in history at that time and paved the way for other Chinese companies seeking fresh capital to list on the US stock exchange.

Founded in 1999 in Ma’s apartment and serving a large population in China, the e-commerce company has seen the wrath of US and Chinese regulators amid a broad crackdown, beating its shares since 2020.

It now plans to add a primary listing in Hong Kong, targeting investors in mainland China.

“Applying for primary listing status in Hong Kong doesn’t necessarily mean they think they’re going to be delisted in the US…it’s just to mitigate that potential risk,” said Bo Pei, an analyst at US Tiger Securities. .

Others added to the list on Friday included Mogu Inc, Boqii Holding Ltd, Cheetah Mobile Inc and Highway Holdings Ltd.

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