Alibaba says it can comply with US securities rules
May 23 2020 11:57 PM
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Maggie Wu, chief financial officer of Alibaba Group Holding, arrives for a meeting at the Waldorf Astoria in New York. Wu said the company “will endeavour to comply with any US legislation whose aim is to protect and bring transparency to investors who buy securities on US stock exchanges.”

Bloomberg/Hong Kong

Alibaba Group Holding Ltd chief financial officer Maggie Wu said the company is closely monitoring a US bill that aims to delist foreign companies from the country’s stock exchanges and anticipates that it will be able to comply with any new regulations.
Wu said the company “will endeavour to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on US stock exchanges.”
The legislation, which was approved by the Senate Wednesday and is targeted at Chinese listings, would require companies to certify that they aren’t under the control of a foreign government.
The new rules could mandate that Chinese companies hand over the original auditing documents, which could create some challenges because Chinese law restricts their distribution.
In a conference call to discuss the company’s quarterly financial results, Wu said Alibaba has long worked within US accounting rules and is audited by the Hong Kong arm of accounting firm PricewaterhouseCoopers LLP.
She also pointed out that US investors who bought Alibaba stock during the company’s 2014 initial public offering would have benefited handsomely.
Alibaba’s shares are up 197% since then, compared with a 2% increase in the New York Stock Exchange Composite Index.
The proposed law, which has bipartisan support and will next be reviewed by the House, comes as tensions escalate between American and Chinese officials.
Alibaba chief executive officer Daniel Zhang said Friday the rising political tensions have added another layer of uncertainty in the post-pandemic world.
Alibaba has been plagued by years of Securities and Exchange Commission investigations and questioning from analysts about its financial structure and accounting practices since its US IPO. Inquiries have focused on the consolidation of Alibaba’s businesses and related-party transactions including Ant Financial and its Cainiao Network logistics arm.
The company has also been probed on how it calculates “gross merchandise volume,” a key metric to determine its e-commerce growth rate, and how it reports data from its Singles’ Day promotion.
Alibaba on Friday reported its slowest pace of revenue growth on record, reflecting the impact of China’s economic contraction across its online marketplaces.
Read more: Alibaba Sales Growth Plumbs New Low During China’s Slowdown The Chinese e-commerce leader forecast growth in revenue this year of least 27.5% to more than 650bn yuan ($91bn), compared with the 657bn yuan average analysts were projecting.
Sales rose 22% to 114.3bn yuan in the March quarter.
Net income was 3.2bn yuan, down from a year ago when it booked an 18.7bn yuan one-time gain on investments.



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