In separate statements released on Friday, China Life Insurance, PetroChina, Sinopec, Aluminum Corporation of China and Sinopec Shanghai Petrochemical said they had notified the NYSE and requested a “voluntary delisting.”
All five companies cited “low sales in the USA” and “high administrative workload and costs” as reasons for leaving.
But the news comes after all five were flagged by the US Securities and Exchange Commission in May for failing to comply with US auditing standards, according to Reuters.
China’s securities regulator, the China Securities Regulatory Commission, said on Friday that it is aware of the situation and that “it is normal for companies to be listed or delisted on any market.”
“We will remain in contact with foreign supervisory authorities and together we will protect the rights of companies and investors,” it said.
The news comes as the Securities and Exchange Commission is stepping up its scrutiny of Chinese company audits.
Chinese companies trading overseas must keep their audit records in mainland China, where they cannot be audited by foreign authorities.
Still, companies like Alibaba are taking steps to prepare for a potential loss of direct access to US capital markets.
Even before the Commission placed Alibaba on its watch list, the company announced that it would seek an initial listing on the Hong Kong Stock Exchange.
Currently, Alibaba has a secondary listing on the Hong Kong Stock Exchange.
If the transition goes smoothly for Alibaba, it could “set the stage” for many more Chinese ADRs to pursue a similar switch, Citi analysts said.