Drama between the three Chinese telecom giants and NYSE

January 06, 2021 09:50
Photo: Reuters

Imagine for a moment if you are an executive of a major Chinese telecom giant who received the “New Year Greeting” from the New York Stock Exchange (NYSE) that reads:

“NYSE Regulation reached its decision that the Issuers are no longer suitable for listing pursuant to Listed Company Manual Section 802.01D in light of Executive Order 13959 (the ‘Order’), which was signed on November 12, 2020. ”

The Issuers refer to China Telecom, China Mobile and China Unicom.

Get up! The moment you saw the news, you know the first day holiday will be wasted. The clock is already clicking because you have exactly one week to round off the delisting procedure in United States, thanks to the outgoing President Trump that kicked off anti-Chinese enterprise campaign in 2018.

Pick up your phone. Your boss and board need to know what happened. You call the lawyers, accountants and public relations agency to seek help. Of course you need to update how many US investors own the company’s shares. All these had to be ready before making the announcement before market’s reopening on Jan 4.

An announcement eventually came out to express regrets on the aforesaid decision and action of NYSE, despite not having received the official delisting notice.

As expected, it was bad news to the three already battled telecom giants.

The trio fell to multi-year lows before stabilizing around noon time on the first day of trading.

Well, miracle happens. The NYSE made a U-turn on its delisting decision in an update announcement.

“In light of further consultation with relevant regulatory authorities in connection with Office of Foreign Assets Control FAQ 857, available here, the New York Stock Exchange LLC (“NYSE”) announced today that NYSE Regulation no longer intends to move forward with the delisting action in relation to the three issuers enumerated below (the “Issuers”) which was announced on December 31, 2020.”
Oh, has Christmas come 355 days earlier? Investors snapped up their shares in celebration for the abrupt reversal.

Apparently the trio learnt a lesson from the cry wolf, they put out a rather cautious statement with “continue” as the most frequently used words:

“NYSE Regulation will continue to evaluate the applicability of the Executive Order to the Company and its continued listing status. The Company will continue to monitor the development in related matters.”

Is this the end? Well, not so fast. The American media reported Treasury Secretary Steven Mnuchin told the board of the NYSE that he opposed to its decision to grant the companies a reprieve.

The NYSE is reportedly reconsidering its move to halt the delisting of the three Chinese telcos.

Well, there is never a boring day between United States and China for economy supremacy.

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EJ Insight writer