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Alibaba shares extend losses on US delisting scare

Image: — © AFP GREG BAKER

Chinese e-commerce giant Alibaba sent Hong Kong tech shares plummeting on Monday after US authorities placed it on a watch list that could see it delisted in New York if it fails to comply with disclosure orders.

The market heavyweight fell more than 5% in early trade, pushing it to its lowest level since May and dragging the Hang Seng Tech Index down with it.

The US securities watchdog said on Friday it added the Chinese company to a list of more than 250 others who could be kicked off Wall Street – where it was listed in 2014 – if strict audit requirements were not met. not complied with for three consecutive years.

The announcement comes as tensions between Washington and Beijing are heightened by a range of issues, including technology, human rights and Taiwan.

It also follows a report last week that founder Jack Ma plans to cede control of Ant Group as part of a strategy to appease Chinese regulators and reinvigorate the company’s initial public offering. digital payment unit.

The company has been under intense pressure for more than a year due to a crackdown on the tech sector by Chinese authorities, sending its share price down about 70% from its all-time high at the end of 2020.

It was hit with a record $2.75 billion fine in April 2021 for anti-competitive practices.

Earlier this year, Alibaba removed all Ant-related executives from the Alibaba Partnership, a group that can appoint the majority of Alibaba’s board.

News of Ma’s decision wiped out Alibaba’s gains from earlier this week, when the company announced it would seek a primary listing in Hong Kong to better access the large pool of Chinese investors.

The selloff – it fell more than 10% in New York – was compounded by concerns over Alibaba’s upcoming earnings report, which many fear will show its first ever drop in quarterly revenue.