Five Chinese state-owned companies to be removed from NYSE

SHANGHAI/HONG KONG, Aug. 12 (Reuters) – Five Chinese state-owned companies, including China Life Insurance (601628.SS) and oil giant Sinopec (600028.SS) said Friday they would delist the New York stock exchange amid heightened diplomatic and economic tensions with the United States.

The companies, which also include Aluminum Corporation of China (Chalco) (601600.SS), PetroChina (601857.SS) and Sinopec Shanghai Petrochemical Co (600688.SS), said in separate statements they would request the deletion of their American Depository . Shares from later this month.

The five, who were added to the list of the Holding Foreign Companies Accountable Act (HFCAA) in May after it was determined that they failed to meet U.S. regulators’ auditing standards, will keep their listings in the Hong Kong and mainland Chinese markets. .

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There was no mention of the audition feud in separate statements by the Chinese companies outlining their moves, which came amid heightened tensions following last week’s visit to Taiwan by US House Speaker Nancy Pelosi. .

Beijing and Washington are in talks to resolve a long-running dispute that could mean kicking Chinese companies off US exchanges if they don’t adhere to US auditing rules.

“These companies have strictly adhered to the rules and regulatory requirements of the US capital market since their US listing and made the choice for their own business considerations,” the China Securities Regulatory Commission (CSRC) said in a statement.

Some of China’s largest companies, including Alibaba Group Holdings, JD Com Inc and Baidu Inc, are among the nearly 270 companies on the list and are in danger of being delisted.

Alibaba said last week that it would convert its secondary listing in Hong Kong to a dual primary listing, which analysts say could pave the way for the Chinese e-commerce giant to switch primary listing locations in the future. read more

In premarket trading on Friday, US-listed shares of China Life Insurance and oil giant Sinopec fell 5.7% and about 4.3%, respectively. Aluminum Corporation of China fell 1.7% while PetroChina lost 4.3%. Sinopec Shanghai Petrochemical Co. lost 4.1%.

“China is sending the message that its patience is running out in the audit discussions,” said Kai Zhan, senior counsel at the Chinese law firm Yuanda, which specializes in US capital markets and US sanctions compliance, among other things.

Washington has long demanded full access to the books of US-listed Chinese companies, but Beijing has banned foreign inspection of audit documents from local audit firms, citing national security concerns.

The companies said their US-traded share volume was small compared to that in their other major publicly traded locations.

PetroChina said it had never raised follow-up capital from its US listing and that its bases in Hong Kong and Shanghai “can meet the company’s fundraising requirements” and provide “better protection of investors’ interests.”

China Life and Chalco said they would file a delisting request on Aug. 22, which would take effect 10 days later. Sinopec and PetroChina said their applications would be submitted on August 29.

China Telecom (0728.HK), China Mobile (0941.HK) and China Unicom (0762.HK) were banned from the United States in 2021 following a Trump-era decision to curtail investment in Chinese tech companies. That ruling has been left unchanged by the Biden administration amid ongoing tensions.

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Reporting by Samuel Shen in Shanghai, Scott Murdoch in Hong Kong and Medha Singh in Bengaluru; Editing by Hugh Lawson, David Goodman and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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