and electric-vehicle maker
were among more than 80 companies added to a list compiled by the Securities and Exchange Commission for possible delisting if they aren’t more transparent with their financial accounting.
The revelation was hitting the U.S.-listed shares of the Chinese companies. NIO (ticker: NIO) stock was down about 4.2% on Thursday. JD.com (JD) fell roughly the same amount. The
fell 1.1% and the
Dow Jones Industrial Average
Other companies added to the list include
(JKS). Chinese companies are among the main targets.
The SEC placed the companies on the list under the Holding Foreign Companies Accountable Act, a 2020 law that says any companies that use an auditor whose work cannot be inspected or investigated by the U.S. Public Company Accounting Oversight Board, or PCAOB, for three straight years must delist from U.S. stock exchanges.
The companies need new auditors — or they need their auditors to submit to U.S. oversight. Auditors in China are, essentially, outside the PCAOB jurisdiction and need approval from Chinese officials to be checked.
NIO’s auditor, PricewaterhouseCoopers Zhong Tian, has been the company’s auditor since 2015.
JD.com (JD) in a statement released Thursday, said it was aware the company has been identified under the SEC act. JD.com, the Chinese e-commerce company, said it “has been actively exploring possible solutions.”
“The Company 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 Hong Kong Stock Exchange,” JD.com said.
NIO said in a news release it has been “actively exploring possible solutions to protect the interest of its stakeholders,” adding that it 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 the NYSE and the HKEX in compliance with applicable listing rules.”
Coming into Thursday trading, NIO stock has fallen about 43% year to date. Rising interest rates and inflation have sapped some investor enthusiasm for high-growth stocks. The
Russell 1000 Growth Index,
for instance, is down about 17% year to date. JD.com shares have declined about 10% year to date.
Write to Joe Woelfel at [email protected]