Chinese e-commerce giant Alibaba led tech stocks in Hong Kong on Monday after US authorities put it on a watch list where it could be delisted in New York if it fails to comply with disclosure orders.
The market heavyweight was down more than five percent in early trade, pushing it to its lowest level since May and dragging the Hang Seng Tech Index with it.
The US Securities and Exchange Commission said on Friday it had added the Chinese firm to a list of more than 250 others that could be booted from Wall Street – where it was listed in 2014 – if it fails to meet stringent audit requirements for three straight years .
The announcement comes as tensions between Washington and Beijing are dragged down over a range of issues including technology, human rights and Taiwan.
It also follows a report last week that founder Jack Ma plans to relinquish control of Ant Group as part of a strategy to appease Chinese regulators and revive the digital payments unit’s IPO.
The company has been under severe pressure from Chinese authorities’ crackdown on the tech sector for more than a year, causing its share price to plummet about 70 percent from its late-2020 record high.
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 Alibaba Partnership, a group that can nominate a majority of Alibaba’s board of directors.
Reports of Ma’s decision wiped out Alibaba’s gains from earlier in the week, when the company announced it would seek a primary listing in Hong Kong to better access China’s vast pool of investors.
The sale — down more than 10 percent in New York — was made worse by concerns over Alibaba’s forthcoming earnings report, which many fear will show the first drop in quarterly sales.
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