Alibaba shares extend losses amid fears of US delisting

(Files) An Alibaba banner is seen outside the company’s office in Beijing on April 13, 2021 (Photo by Greg Baker/AFP)

HONG KONG (China) (AFP) – Chinese e-commerce giant Alibaba led technology shares to decline in Hong Kong on Monday after US authorities placed it on a watch list that could lead to it being delisted in New York if it does not comply with disclosure orders.

The market heavyweight sank more than five per cent in early trading, pushing it to its lowest level since May and dragging the Hang Seng Tech index with it.

The US Securities and Exchange Commission said on Friday it had added the Chinese company to a list of more than 250 other companies that could be taken off Wall Street – where it was listed in 2014 – if stringent audit requirements are not met for three consecutive years.

The announcement comes as tensions are declining between Washington and Beijing over a range of issues including technology, human rights and Taiwan.

It also comes on the heels of a report last week that founder Jack Ma plans to relinquish control of Ant Group as part of a strategy to appease Chinese regulators and revive the digital payments unit’s initial public offering.

The company has come under heavy pressure from a crackdown on the tech sector by Chinese authorities for more than a year, which sent its share price down nearly 70 percent from its high in late 2020.

A record $2.75 billion fine was imposed in April 2021 for anti-competitive practices.

Earlier this year, Alibaba removed all executives associated with Ant from the Alibaba Partnership, a group that can nominate a majority of Alibaba’s board members.

Reports about Ma’s decision wiped out Alibaba’s gains earlier in the week, when the company announced it would seek an initial Hong Kong listing to better access a large group of investors in China.

The sale – which fell more than 10 per cent in New York – was exacerbated by concerns about Alibaba’s upcoming earnings report, which many fear will show the first-ever drop in quarterly revenue.


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