The New York Stock Exchange has begun the process of delisting three Chinese telecom firms following moves of the US government to ban companies with ties to the Chinese military.
The three telecoms companies listed at NYSE that are up for delisting are China Telecom Corporation Limited, China Mobile Limited, and China Unicom (Hong Kong) Limited, the NYSE said in a statement on December 31.
The recent delisting is an aftereffect of US President Donald Trump’s pronouncements through an Executive Order 13959 that lists these three companies among others into the so-called Entity List due to their ties to the Chinese military.
China Telecom, China Mobile, and China Unicom will be seeing their securities suspended from Wall Street trading between Jan. 7 and Jan. 11 the NYSE statement added.
The NYSE will settle trades of the three firms on January 11 while it will suspend trading of the listed companies on January 7, 2021.
Despite their Wall Street listing, the three companies earn the bulk of their revenue in China and have no significant presence in the US.
The delisting becomes part of the saga that has been happening during the Trump administration that has been escalating tensions amid an economic trade war between Beijing and Washington.
The Pentagon identified a total of 35 Chinese companies to have links to the Chinese military, formally known as the People’s Liberation Army. The designations were made under a requirement under section 1237(b) of the National Defense Authorization Act (NDAA), the annual defense spending bill.
Trump signed the executive order in November banning Americans from investing in some 31 Chinese companies that are reported to be supplying or supporting Beijing’s military and security activities which has been strongly condemned by China as part of ‘bullying tactics” to their economic growth.
The presidential order also prohibits US firms and individuals from owning shares in any of the 31 companies, which also include video surveillance firm Hikvision and China Railway Construction Corp.
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Earlier, Trump also issued bans of trade with Chinese Big Tech that include Huawei, Alibaba, Tencent’s WeChat, SMIC, and ByteDance’s TikTok.
“The NYSE will apply to the Securities and Exchange Commission to delist the issuers and securities upon completion of all applicable procedures, including any appeal of the NYSE Regulation staff’s decision,” the statement reads.
The New York Stock Exchange statement also pointed out that issuers were no longer suitable for listing as Trump’s order bans any transactions in securities “designed to provide investment exposure to such securities, of any Communist Chinese military company, by any United States person”.
The recent trade war between Washington and Beijing has prompted many Chinese companies to seek a dual listing in New York and Hong Kong as a precaution. Among these companies include Chinese e-commerce giants Alibaba and JD.com that have opened secondary listings in the HKSE as the economic tension intensified.
Based on a report from the BBC, there are currently more than 200 Chinese companies listed on US stock markets with a total market capitalization of $2.2tn (£1.6tn).
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