NYSE process of delisting Chinese telco giants starts

NEW YORK • The New York Stock Exchange (NYSE) said it will delist three Chinese corporations to comply with a US executive order that imposed restrictions on companies identified as affiliated with the Chinese military.

China Mobile, China Telecom, and China Unicom Hong Kong will be suspended from trading between Jan 7 and 11, and proceedings to delist them have started, according to a statement by the exchange this week.

The move by the NYSE, which will limit US investor access, follows global index providers MSCI Inc, S&P Dow Jones Indices and FTSE Russell and Nasdaq deleting various Chinese companies from their indexes.

The three companies have separate listings in Hong Kong. All generate the entirety of their revenue in China and have no meaningful presence in the US except for their listings there.

It is “a modest step, but at least an awakening to national security and human rights-related risk”, said former White House official Roger Robinson, who supports curbing Chinese access to US investors.

China Telecom is also under fire from the US Federal Communications Commission, which last month said it had begun the of revoking the company’s authorisation to operate in the United States.

President Donald Trump signed an order in November barring American investments in Chinese firms owned or controlled by the military, in a bid to pressure Beijing over what it views as abusive business practices.

The order prohibited US investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties.

The Chinese Foreign Ministry later accused the US of “viciously slandering” its military-civilian integration policies and vowed to the country’s companies. Chinese officials also threatened to respond to previous Trump administration actions with their own blacklist of US companies.

Global exchanges, including NYSE and Nasdaq, courted Chinese companies during the past decade as they tried to expand their IPO business, particularly in the Internet sector.

In response, Hong Kong Exchanges & Clearing changed its rules in recent to lure back initial public listings, including allowing share sales by firms with weighted voting rights – strengthening the power of company founders at the expense of weaker protections for minority investors.

Companies including e-commerce giants Alibaba Group and JD.Com, which already had listings in New York, conducted secondary listings in Hong Kong in the past two as the trade war between the US and China intensified.

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