China Telecom to deregister US shares after FCC ban

China Telecom to deregister US shares after FCC ban

China Telecom.jpg

China Telecom has taken the latest step to exit the US following its ban by the US regulator.

The company announced this morning from Hong Kong that it was seeking to deregister its share-equivalents in the US and end its obligations to report results in the US.

China Telecom said it will file the request with the US Securities and Exchange Commission (SEC) today to deregister its American Depositary Shares (ADSs), which are share-equivalents that were traded on the New York Stock Exchange (NYSE) until December.

That decision followed an announcement in October 2021 by Jessica Rosenworcel, chairwoman of the Federal Communications Commission (FCC), to withdraw China Telecom’s licence to operate in the US.

The US began its work to ban the company in 2020. The FCC also imposed a similar ban on China Unicom and on subsidiaries of CITIC offshoots – Pacific Networks and ComNet.

The move will be watched carefully by Russian operators with a US presence. The US government has shown itself powerful to banning or keeping out Chinese telcos, including China Mobile, which was refused an operating licence, and in excluding Huawei as a vendor to the US and – because of its use of US components and software – from many international markets.

China Telecom said this morning that it expects the deregistration and termination of reporting obligation to become effective in 90 days – in other words, on 26 May.

It “will continue to comply with its financial reporting and other obligations” under the rules of the Hong Kong and Shanghai exchanges, it added.