Companies in mainland China and Hong Kong are notorious for not submitting their financial statements to US government-approved auditors.
A law passed in 2020 by the U.S. Congress requires any company registered in the United States to certify its accounts by a firm approved by the independent accounting organization PCAOB.
In case of non-compliance with the legislation, companies risk deregistration from 2024.
In this context, oil giants Sinopec and PetroChina indicated in separate press releases on Friday a “voluntary exit” from the New York Stock Exchange, where they are listed.
Such moves have been announced by insurance giant China Life Insurance, Chinese aluminum giant Chalco and Shanghai subsidiary Sinopec.
Everyone justifies this decision with the costs associated with maintaining a listing in the US, as well as the burden of meeting audit obligations.
Five groups are on the list of companies ordered by the US market regulator (SEC) to comply with accounting obligations and therefore threatened to be evicted from the US stock market.