Regulators in the United States of America are taking steps to enforce a new law that may see Chinese companies with accounting papers that cannot be inspected get delisted.
Weibo, the Chinese Twitter-like platform has been included in a delisting watchlist by the US Securities and Exchange Commission (SEC). This automatically means that other Chinese companies including Alibaba and Baidu could suffer the same fate.
Regulations that seem to be targeted at Chinese companies are not new. Back in 2020, during the Donald Trump administration, a bill demanding the inspection of US-listed foreign companies was passed. The bill seems to have a major focus on Chinese big names and of course did not go down well with a number of countries out of fear that giving out such information could compromise the national security of their countries.
Although it may look like regulations like these are focused on Chinese companies but it is so because China is one of the few countries that have not been cooperating with the Public Company Accounting Oversight Board, a body created by the SEC to monitor and audit foreign companies trading stocks in the US. Reports, however, have it that some of these companies are working on compliance even though the auditing documents they plan to share will not include sensitive data.
Chinese companies listed in the US have since started to look at secondary listings in Hong Kong. China’s recent actions may be a signal that the country is looking to keep its tech companies in US markets which are mostly preferred to firms that are looking for growth.
Weibo is yet to comment on the recent development, whether it is planning to delist and focus on Hong Kong where it was listed last year or comply with the law.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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