By Dhirendra Tripathi
Investing.com – Baidu (NASDAQ:BIDU) stock traded 3.5% weaker in premarket Thursday after the U.S. securities regulator added its name to the list of companies that face the risk of being delisted.
The root of the case is in a 2020 U.S. law that mandates public companies to grant American authorities access to audit work papers. Firms face desilting in case of non-compliance for three straight years. Beijing has so far refused to permit U.S. officials to review their auditors’ work.
“Baidu has been actively exploring possible solutions. Baidu will continue to comply with applicable laws and regulations in both China and the United States, and strive to maintain its listing status on both Nasdaq and the HKEx,” the company said in a release.
Regulators in Beijing argue that their national security law prohibits them from turning over audit papers to U.S. regulators while the critics argue that Chinese firm get to enjoy access to cheap American capital without really following all the rules that other companies are subjected to.
Before this, there were five Chinese companies that were on the SEC list: BeiGene (NASDAQ:BGNE), Yum China (NYSE:YUMC), Zai Lab (NASDAQ:ZLAB), ACM Research Shanghai (NASDAQ:ACMR), and HUTCHMED (NASDAQ:HCM).
The SEC also added Futu Holdings (NASDAQ:FUTU), Nocera, CASI Pharmaceuticals (NASDAQ:CASI) and Baidu’s video arm iQIYI (NASDAQ:IQ) to its provisional list for possible delisting.