Alibaba has struggled with growth amid tighter regulation of China’s domestic tech sector and a slowdown in the world’s second-largest economy. But analysts believe the e-commerce giant’s growth could pick up before the end of 2022.
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Chinese e-commerce giant Alibaba said it will comply with US regulatory requirements and will work to maintain its listings in New York and Hong Kong.
“Alibaba will continue to monitor market developments, comply with applicable laws and regulations, and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” the Hong Kong exchange said in a statement on Monday.
The announcement comes after Alibaba was added on Friday to the U.S. Securities and Exchange Commission’s list of Chinese companies facing delisting for failing to comply with audit requirements. As a result, US-listed Alibaba shares fell 11% in trading on Friday.
Under Law on bringing foreign companies to liability law, the SEC designates public companies that have hired a registered accounting firm to issue an audit report if the firm has a branch or office.
On Monday, Alibaba said it had been added to the SEC list, indicating that its audit for the fiscal year ending March 31, 2022 could not be fully reviewed by the U.S. Public Company Accounting Oversight Board.
Under the HFAA, if the PCAOB fails to fully audit the financial statements of a U.S. registered company for three consecutive “non-audit” years, the SEC is required to prohibit the company’s securities from trading in U.S. markets.
The Chinese tech giant said last week that apply for a dual primary listing in Hong Kong. The tech giant’s shares are already listed on the US and Hong Kong exchanges, but the current listing in Hong Kong is a minor one.
The initial listing process in Hong Kong is expected to be completed before the end of 2022. the company said in a statement.
— Abigail Ng of CNBC contributed to this report.