11 Communist China’s Companies Facing Delisting by the American SEC

The US Security and Exchange Commission (SEC) began to intensively update its provisional list this month. On May 9, the SEC announced the seventh list under the “Holding Foreign Companies Accountable Act” (HFCAA), adding 11 Communist China’ companies to the list, and the previous list was announced only 5 days ago.

This time the Communist Chinese stocks added to the provisional list included Lufax Holding (LU), a subsidiary of Ping An Insurance, Kingsoft Cloud Holdings (KC), a subsidiary of Kingsoft Corporation, So-Young International (SY), a medical aesthetic services online platform, Lightinthebox Holding (LITB), a global online retail company, Dingdong Ltd, a raw food e-commerce platform, and Didi, which has been listed for less than one year.

The SEC requires the 11 companies to submit evidence on or before May 31 to prove that they do not have a reason to be delisted, otherwise they will be included in the conclusive list. According to the HFCAA, signed into law in 2020, when a listed company is included in the conclusive list and has failed to comply with American auditing standards for three consecutive years, it will be forcibly delisted from US exchanges. Up to now, more than 140 companies from Communist China face delisting.

Earlier, it was reported that U.S. officials from regulatory agencies had arrived in Beijing to discuss the audit compliance issues with the CCP. As the deadline for new quarterly performance disclosure expires, it is likely that more companies from Communist China will be included in the list.