The Securities and Exchange Commission (SEC) said it determined that Canaan used an auditor whose working papers cannot be inspected or investigated completely by the Public Company Accounting Oversight Board (PCAOB).
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Fast facts
- The SEC Wednesday said it is placing 88 Chinese companies, including Chinese mining machine maker Canaan Inc., on a pre-delisting list.
- Canaan Inc. has until May 25 to dispute the identification.
- Canaan’s stock price is down some 3.8% since May 4.
- Canaan on Thursday said it would “continue to comply with applicable laws and regulations in both China and the U.S., and strive to maintain its listing status on NASDAQ.”
- The PCAOB is seeking access to audit working papers of New York-listed Chinese companies stored in China.
- China has so far rejected such requests on national security grounds.
- Finalized in 2021, the Foreign Corporate Accountability Act (HFCAA) stipulates that a company put on such a list by the SEC for three consecutive years may face delisting.
- So far this year, 105 Chinese companies have been added to the possible delisting list, with 23 firms having been confirmed for delisting.
- Both countries are discussing an audit agreement to avoid the delisting, with Beijing hoping to sign a deal within the year, Reuters reported in April.
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