The Alibaba Group logo is seen at the company’s headquarters in Hangzhou, Zhejiang, China, on July 20, 2018.File photo / Reuters
HONG KONG: US regulators have selected US-listed Chinese companies, including e-commerce giant Alibaba Group Holding Ltd., for audits starting next month, three sources familiar with the matter say. rice field.
The move follows Friday’s landmark audit agreement between Beijing and Washington that allows U.S. regulators to scrutinize accounting firms in mainland China and Hong Kong, the U.S. stock exchange said. It could end a long-running dispute that threatened to force more than 200 Chinese companies out of the country.
Alibaba has been notified that it is one of the first Chinese companies to have its audits inspected in Hong Kong by the Public Company Accounting Oversight Board (PCAOB), a US auditing body, sources told Reuters. .
PwC, the accounting firm for China’s largest e-commerce company, has also been notified of the review of its audit work, the sources said, but declined to specify due to confidentiality restrictions.
Alibaba did not immediately respond to a request for comment, but a PwC spokesperson said it was the company’s policy not to comment on client issues.
A PCAOB spokeswoman said the board had not commented on the inspection. The China Securities Regulatory Commission (CSRC) was not reached for comment after hours.
After the Reuters report, Alibaba’s U.S.-listed shares fell about 3% and rose about 1% in pre-market trading.
For more than a decade, U.S. regulators have demanded access to the audit documents of Chinese companies listed in the U.S., but the Chinese government, citing national security concerns, has refused to allow U.S. regulators to I was reluctant to be audited by an accounting firm.
Alibaba, which went public in New York in 2014 and was the largest public listing in history at the time, is the most valuable Chinese company listed in the United States with a market capitalization of $256 billion as of Monday.
The PCAOB said on Friday that Watchdog notified the selected companies, without naming them, that officials are due to land in Hong Kong where inspections will take place by mid-September.
According to the PCAOB, regulators overseeing audits of U.S. public companies select companies based on risk factors such as size and sector, and no company can expect preferential treatment.
Reuters was unable to immediately identify how many Chinese companies and others were included in the first batch of U.S. surveys.
Founded in 1999, Alibaba considers e-commerce to be its core business, and in recent years has expanded into rapidly growing areas such as cloud services and the Internet of Things. It also owns his AutoNavi Holdings Ltd, a leading digital mapping and navigation company in China.
In July, it was added to the U.S. Securities and Exchange Commission’s (SEC) list of Chinese companies that may be delisted for not complying with audit requirements.
The list now includes more than 160 Chinese companies, including fellow e-commerce group JD.com Inc and electric car maker Nio Inc.
Current U.S. regulations stipulate that Chinese companies that do not comply with audit documentation requirements will be suspended from doing business in the U.S. in early 2024.
Alibaba said days before it was added to the SEC’s delisting watchlist, it plans to target mainland Chinese investors with a major listing in Hong Kong, in addition to its presence in New York. rice field.
The tech giant, which has already been on the Hong Kong stock exchange since 2019 and has completed a secondary listing, expects the primary listing to be completed by the end of 2022.