NEW YORK (AFP) – Five Chinese companies have been ordered to comply with audit requirements by the United States (US) Securities and Exchange Commission (SEC) or face delisting from Wall Street.
The initial group of companies named on a list published by the SEC on Thursday, could soon be followed by all Chinese companies listed in New York, none of which are currently complying with US regulations in this area. In total, some 248 companies are affected, with a market capitalisation of about USD2.1 trillion, according to an ad hoc committee.
The US Congress in 2020 passed a law specifically targetting Chinese companies under which the Public Company Accounting Oversight Board (PCAOB) must be able to inspect audits of foreign firms listed on US markets. Failure to comply could result in delisting as of 2024.
The five companies named on Thursday were the biotech companies BeiGene, Zai Lab and Hutchmed, as well as subcontractor ACM Research and the restaurant group Yum China. Yum China, which controls KFC, Taco Bell and Pizza Hut and other eateries in China, surpasses the other companies by far in revenue and capitalisation.