![]() The Alibaba-backed company offers a repository of big data for the healthcare industry such as clinical trials, AI diagnosis, and management.Ĭontext: Data security and cyber sovereignty are also what China emphasis in recent years. LinkDoc, which due to price its shares on Thursday and expected to raise more than $200m, shelved its Nasdaq IPO plans this week. “After communication with the relevant regulators, Ximalaya understands that a Hong Kong listing would be regarded as a preferred outcome,” people with knowledge of the matter told Financial Times. Ximalaya, which had issued a prospectus in April, also canceled its US IPO in recent weeks. The fitness platform, backed by SoftBank and Tencent, was originally expected to raise up to $500 million in the IPO. Keep, Ximalaya, and LinkDoc call off their US IPO plans J9:17 pmĬhinese fitness app Keep, podcasting platform Ximalaya, medical solution provider LinkDoc reportedly canceled their US IPO plans after Didi debacle.ĭetails: Keep did not go ahead with its planned public filing while its bankers at Morgan Stanley canceled marketing meetings with investors this week, Financial Times reported, citing people familiar with the matter. The Securities and Exchange Commission has finalized new rules, effective Jan.Keep, Ximalaya, and LinkDoc call off their US IPO plans - PingWest English 中文 10, under which companies that fail to comply with audits for three consecutive years will incur a five-year trading ban. The earliest companies might be delisted would be 2024. The shares of delisted firms could continue to trade in the U.S., over the counter. Promulgated in compliance with the Holding Foreign Companies Accountable Act (HFCAA), the rules are meant to counter Chinese companies listed on U.S. exchanges that refuse to have their audits verified. The Public Company Accounting Oversight Board ( PCAOB) was created by the Sarbanes-Oxley Act of 2002 to oversee the audits of public companies, providing external and independent oversight of auditors. The Chinese side claims that Chinese firms are in compliance, as they are audited by the big four accounting firms. The problem is that the Chinese regulators do not allow the audits to be sent to the PCAOB.Ĭhinese law requires companies to obtain the permission of the government before allowing foreign securities regulators to inspect their activities. The companies must also obtain government permission before providing foreign parties with documents or materials relating to capital markets activities. ![]() While Chinese authorities could, theoretically provide this permission. Chinese regulators have frequently refused to allow Chinese companies to be audited. SEC Chairman Gary Gensler reported in December, 2021 that, although more than 50 foreign jurisdictions have cooperated with the PCAOB, neither Hong Kong nor the PRC has.įor more than a decade, the inability to verify the audits of Chinese firms has plagued U.S. The issue came to a head in 2020 because of NYSE-listed Chinese coffee brand, Luckin Coffee. In April 2020, the Chinese coffee chain fired its CEO after discovering that he had fabricated $310 million in sales. Trading was halted, and the firm lost 83% of its value. The company was delisted and later declared bankruptcy. The HFCAA specifically addresses disclosure regarding foreign jurisdictions that prevent inspections. Additionally, the act requires companies to disclose if they are owned or controlled by a foreign government. Currently, there are state-owned and state-controlled companies listed on all three major, U.S. ![]() ![]() listing of Chinese firms, particularly technology companies. The Cyberspace Administration of China requires companies which hold data on more than one million users to seek approval for overseas listing. Additionally, companies in industries which are normally banned from foreign investment must seek a waiver before listing. Once listed, these firms are subjected to national security and cybersecurity reviews. Shortly after Chinese ride-hailing app DiDi listed on the NYSE, China's cybersecurity regulator ordered the company's app removed from app stores, citing issues of data security. Shareholders sued on the grounds that the company had failed to disclose the discussions it was having with Chinese authorities.
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