Shares of Chinese e-commerce giant Alibaba (NYSE: BABA) tumbled 10 percent on July 29 after the U.S. Securities and Exchange Commission (SEC) added the firm to a list of companies that could face delisting.
The U.S.-listed Chinese company is among the more than 150 companies named by the SEC that could be booted from U.S. exchanges if American regulators are unable to inspect financial audits for three years in a row.
The firms were identified under the requirements of the Holding Foreign Companies Accountable Act (HFCAA), signed into law in late 2020, that gives Chinese companies until early 2024 to comply with U.S. auditing requirements. The law was passed in response to Beijing’s long-running refusal to allow U.S. regulators to access audit papers of its accounting firms, citing state secrecy. U.S. Congress is currently considering a bill that would accelerate the deadline under HFCAA to 2023….