The US public company accounting regulator will not accept any restrictions on its access to the audit papers of Chinese companies listed in New York, including where firms have been delisted, two people with knowledge of the US agency's thinking told Reuters.
Washington and Beijing are in talks to settle a long-running dispute over the auditing compliance of US-listed Chinese firms which, if unresolved, could see more than 270 Chinese firms kicked off New York bourses.
Authorities in China have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.
A person familiar with the thinking of the Public Company Accounting Oversight Board, which oversees audits of US-listed companies, said delisting Chinese companies would not bring Beijing in line with the US rules. The PCAOB must be able to pick who it wishes to inspect, based on risk, said the person. "If the Chinese regulators are going to restrict us to any degree, that would not allow us to achieve the mandate and we would not accept it."
Most of these China concept stocks are expected to list in Hong Kong, and Alibaba's (9988) application for a primary listing in the city could provide a template for the roughly 200 US-traded Chinese companies from JD.com (9618) to Baidu (9888) that face delisting. UBS expects these companies will not price the shares aggressively for a Hong Kong listing due to the dull market sentiment.
Meanwhile, Malaysian food and beverage distributor Swang Chai Chuan has passed the listing hearing to list in the city.
China and the US are holding talks over the long-running dispute. AFP
