Sinopec and PetroChina, one of the world’s largest energy groups, said in separate statements that they would apply for a “voluntary withdrawal” from the US stock market.
Similar announcements were made by the Chinese aluminum company “Chalco”, “China Life” and a subsidiary of “Sinopec” based in Shanghai.
Mainland China and Hong Kong companies are notorious for not submitting their financial statements to auditors approved by US authorities.
A law passed in 2020 by the US Congress requires any company listed in the United States to have its accounts approved by a company accredited by the Independent Accountability Organization.
In the event of non-compliance with the legislation, companies face the risk of canceling their registration as of 2024. In this context, the five companies announced their withdrawal decision.
It justified its decision by the cost associated with maintaining the registration in the United States as well as the burden of complying with audit obligations.
The five groups are on a list of companies ordered by the US market regulator to comply with imposed accounting obligations and were essentially at risk of being expelled from the New York Stock Exchange.