More than 80 Chinese companies are at risk of being delisted from US stock exchanges, the Securities and Exchange Commission (SEC) has said.
The SEC added a number of tech companies including Tencent, JD.com, China Mobile, and data center provider Vnet Group to a provisional list where firms have 15 business days to contest the decision.
The SEC shall delist companies that have been identified as being unable to be inspected by the Public Company Accounting Oversight Board of the United States for three consecutive years.
The Holding Foreign Companies Accountable Act, passed by the Trump administration and enacted by the SEC last year, requires companies that issue securities in the US to disclose to auditors how many of its shares are owned by governments.
The act also allows auditors to discover whether governments exercise control over the company, or if the company, executives, or its investors are connected to the Chinese Communist Party.
Among the companies added to the list are Chinese eVTOL aircraft developer EHang, electric car company NIO, online leisure travel company Tuniu Corporation, game live-streaming platform Huya, and mobile Internet company CooTek.
Vnet, the Chinese data center firm previously known as 21Vianet, said that "The company understands that the SEC made such identification pursuant to the HFCAA and its implementation rules issued thereunder.
"This indicates that the SEC has determined the company used a registered public accounting firm as its independent auditor whose working paper cannot be inspected or investigated completely by the Public Company Accounting Oversight Board of the United States (the PCAOB), to issue the audit opinion for the Company's financial statements for the fiscal year ended December 31, 2021."
Vnet operates in more than 30 cities throughout China. Late last year, it entered into a joint venture with an undisclosed sovereign wealth fund to develop and operate build-to-suit hyperscale data centers in the country. A few months later, it raised $250 million from US investment firm Blackstone, following a prior $150m raise.
However, the company is in talks with Chinese investment firms about a potential acquisition, which would also remove it from the Nasdaq.
