In separate statements released on Friday, China Life Insurance, PetroChina, Sinopec, Aluminum Corporation of China and Sinopec Shanghai Petrochemical said they had notified the NYSE and requested “voluntary delisting.”
The five companies cited “low U.S. revenue” and “high administrative overhead and costs” as their reasons for leaving.
However, the news comes after the five were flagged by the U.S. Securities and Exchange Commission in May, according to Reuters, for failing to meet U.S. auditing standards.
China’s securities watchdog, the China Securities Regulatory Commission, said on Friday it was aware of the situation and that “it is normal for companies to be listed or delisted from any market”.
“We will keep in touch with foreign regulatory institutions and jointly protect the rights of companies and investors,” he said.
Increased control
The news comes as the Securities and Exchange Commission steps up its scrutiny of audits of Chinese companies.
Chinese companies trading overseas are required to hold their audit documents in mainland China, where they cannot be reviewed by foreign agencies.
Nevertheless, companies like Alibaba are taking steps to prepare for a possible loss of direct access to the US capital market.
Even before the commission added Alibaba to its watchlist, the company said it would seek a primary listing on the Hong Kong stock exchange.
Currently, Alibaba has a secondary listing on the Hong Kong Stock Exchange.
If the transition goes smoothly for Alibaba, it could “pave the way” for many other Chinese ADRs to pursue a similar change, Citi analysts said.
