UPDATE Shares of three major Chinese telecom carriers will be delisted from the New York Stock Exchange after their appeals against being dropped were rejected, reports Markets Insider.
China Mobile, China Unicom (Hong Kong), and China Telecom said they all expected the NYSE to request permission from the Securities and Exchange Commission to delist their American depositary receipts, according to the account. The SEC said the delisting will take effect in ten days, according to the account.
In response, China Mobile stated it will continue to pay close attention to the development of “related matters and seek professional advice to protect the lawful rights of the company and its shareholders.”
On November 12, 2020, former President Donald Trump issued an order barring investments in publicly traded companies that the U.S. government believes are owned or controlled by the Chinese military. There was some back and forth between the NYSE and the Chinese telecoms. The NYSE at one point reversed its decision, but then said it would go ahead with the move to delist the shares. When Joe Biden took office in January, the three companies asked the exchange to review its decision.
Trading of American depositary receipts — securities that allow U.S. investors to trade in foreign companies — of the three telecoms, has been suspended since January 11, according to Markets Insider.
The Holding Foreign Companies Accountable Act, signed into law in December 2020, requires certain foreign companies identified by the SEC to disclose their shareholder information. This puts some Chinese companies at risk of being delisted because in the past, China has refused the U.S. Public Company Accounting Oversight Board to audit Chinese firms, often citing national security concerns.
This March, the SEC said non-compliance for three consecutive years will get companies kicked off from the NYSE or Nasdaq.
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