Aluminum Corporation of China voluntarily withdraws from NYSE in accounting – Aluminum Insider

The world’s second-largest alumina producer is one of several state-owned companies in the People’s Republic of China that has voluntarily delisted from the New York Stock Exchange over a disagreement over auditing standards.

Aluminum Corporation of China (Chalco) said last week that it would seek delisting of its US filing shares by the end of the month. The other companies, namely China Life Insurance, Sinopec, PetroChina and Sinopec Shanghai Petrochemical, plan to remain listed on the Hong Kong and China stock exchanges.

The delisting is part of a larger dispute between Beijing and Washington, DC over auditing standards. The long disagreement stems from the US demand to see full financial details of Chinese companies listed on US stock exchanges.

Although the issue had been a bone of contention for more than a decade, the United States finally imposed the issue in December with the passage of the Holding Foreign Companies Accountable Act. Rules promulgated under the law could potentially prohibit trading in shares of Chinese companies due to auditing standards.

According to the Securities and Exchange Commission, nearly 300 Chinese companies could be delisted from US stock exchanges unless they open their books to regulators.

The Securities and Exchange Commission determined this spring that the above Chinese companies are among several whose auditing procedures fall below US standards. Chinese companies have rebuffed requests to see financial details saying it would jeopardize national security.

China Securities Regulatory Commission (CSRC) insists that foreign companies have so far complied with the letter of the law.

“These companies have strictly adhered to U.S. capital market rules and regulatory requirements since listing in the United States and have elected to delist for their own business considerations.”

The CSRC went on to say that it would maintain “open communication with relevant foreign regulatory agencies.”

When contacted for comment, neither the NYSE nor the Public Company Accounting Oversight Board (PCAOB), which is overseen by the SEC, chose to postpone.

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