In response to the New York Stock Exchange’s sudden “volte-face” and its intention not to proceed with the cancellation of the listing of China Mobile (00941), China Unicom (00762) and China Telecom (00728) American Depositary Receipts (ADRs), foreign media reported that U.S. Treasury Secretary Steven Mnuchin said he disagreed with the NYSE’s decision to “let go” this time.
The report quoted informed sources as saying that Mnuchin had called Stacey Cunningham, president of the NYSE, to express his disagreement with the NYSE’s sudden U-turn. The report also quoted sources as saying that the NYSE’s decision to revoke the delisting process was due to its failure to determine that the securities in question were subject to a presidential executive order, and that the NYSE would restart the delisting program if it was confirmed that the three companies were part of the executive order and were related to the Chinese Communist military.
After the U.S. Treasury Department announced guidelines earlier on prohibiting Americans from investing in a group of key shares believed to be linked to the Chinese Communist Party’s military, the NYSE decided last week to launch delisting procedures for the three major Chinese telecommunications companies named in the order, which was scheduled to be implemented on Thursday (7), but the NYSE suddenly changed its decision by Monday (4).
The NYSE said that after further consultations with the Office of Foreign Assets Control (OFAC) and other relevant regulators, it decided not to move forward with plans to delist the three major state-run telecommunications companies, including CMCC, whose ADRs will continue to trade.
The announcement said the so-called consultation involved an FAQ issued by OFAC, one of the “spicy” guidelines issued by the U.S. Treasury Department last week on the investment ban, which states that all subsidiaries of a company blacklisted for investment are subject to restrictions.
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