In an about turn the New York Stock Exchange stated, it will delist three Chinese telecom companies. The development comes in the wake of U.S. Treasury Secretary Steve Mnuchin telling the NYSE’s chief that he disagreed with its decision to reverse the delistings.
The move marks the third time in less than a week that the NYSE has ruled on the issue.
“There is a unique situation where there is an outgoing administration that is disengaged and (there are) orders sitting out there, so something has to be done, but no one wants to take on responsibility,” said Leland Miller, CEO of U.S.-based consultancy China Beige Book. “I think in future that anyone getting these orders will say: ‘Tell us exactly what you want us to do,’ and force administrations to be more focused.”
According to sources who spoke on the condition of anonymity given the sensitivity of the matter, Mnuchin had called up NYSE President Stacey Cunningham on Tuesday to express his concerns over the decision to relist the Chinese companies.
“The Treasury secretary was on the phone with the NYSE (president) now and was told that NYSE would reverse their decision,” said a U.S. official.
In a statement, the NYSE said, its latest decision, to move ahead with the delistings, was based on “new specific guidance received on January 5, 2021, that the Department of Treasury’s Office of Foreign Assets Control provided to the NYSE”; trading in the securities will be suspended at 4 a.m. ET (0900 GMT) on January 11, said the NYSE.
Republican Senator Ben Sasse, a member of the Senate Select Committee on Intelligence, said the decision was the “right call”.
“Chinese firms that reject fundamental transparency requirements and have ties to the Chinese military shouldn’t benefit from American investment,” said Sasse.
A separate bill signed into law by Trump in November 2020 will remove Chinese companies from U.S. stock exchanges if they do not fully comply with U.S. audit standards in three years.
In a statement the U.S. Treasury said, market intermediaries could help investors divest securities of the blacklisted companies.