Li Auto Inc LI is among 17 new U.S.-listed Chinese companies added to the U.S. Securities and Exchange Commission’s Holding Foreign Companies Accountable Act (HFCAA) list.
What Happened: The inclusion in the list implies these companies can be delisted from U.S. bourses as a result of China’s refusal to allow U.S. regulators to review their auditors’ work.
The foreign-listed companies are required to file reports required by the Public Company Accounting Oversight Board (PCAOB) for three consecutive years.
Unless the HFCAA is amended or the PCAOB can conduct a full inspection of the current auditor during the required timeframe or if the said company engages an independent public accounting firm as per the PCAOB standard, the companies stand to be delisted in 2024.
Li Auto did not immediately respond to Benzinga’s request for comment.
The Beijing-based Li Auto competes with Tesla Inc TSLA and Nio Inc NIO.
What Next?: Li Auto and other companies including KE Holdings Inc BEKE, Luckin Coffee Inc LKNCY and others have up to May 12 to submit evidence to dispute identification, failing which they will be placed on a final list.
SEC had previously named 12 Chinese companies on the list.
The U.S. regulator has currently named 11 Chinese companies including Baidu Inc BIDU, Yum China Holdings YUMC, and others in the conclusive list.
Price Action: Li Auto shares closed 4.3% lower at $22.47 on Thursday and were down 1.6% in after-hours trading.
Photo courtesy: Li Auto
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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