HONG KONG/BEIJING – Chinese regulators have questioned some U.S.-listed companies in China, including Alibaba (NYSE:), Baidu (NASDAQ:).com) to be prepared for further audit disclosures. Sources say that Beijing is intensifying efforts to maintain New York’s domestic company listings.

Two sources claimed that this comes at a time when China’s regulators consider allowing their American counterparts access to audit work papers from some Chinese companies that don’t gather sensitive data.

According to four sources, this was part of the China Securities Regulatory Commission’s (CSRC), along with other regulatory agencies, summoned several top internet companies including Baidu Inc (NASDAQ:), and JD.com Inc., as part of their investigation.

The regulator summoned Weibo Corp and Alibaba Group, which were two sources who had direct knowledge. E-retailer Pinduoduo (NASDAQ:) Inc, gaming company NetEase and (NASDAQ:) Inc were also present at the meeting. One of them was added.

The sources said they were requested to create audit documents for the financial year 2021, keeping in mind U.S regulators’ requests to more disclosure. They declined to identify themselves as they weren’t allowed to share details about the meeting.

If the companies are unsure about any aspect of the process, they should seek advice from Chinese regulators. This includes communications with U.S. regulators.

CSRC didn’t immediately reply to a request of comment.

Weibo and Baidu did not immediately reply to my request for comment. NetEase, Pinduoduo, and JD.com also didn’t immediately respond to a request for comment.

China’s regulators have taken the latest steps to address a Sino-U.S. dispute over an audit that had been raging for years and has resulted in hundreds of billions of U.S. dollars being invested in Chinese businesses.

American authorities have begun to expel Chinese companies from American stock markets if audit records for the company aren’t available for them inspection.

LISTING RISKS

The U.S. Securities Exchange Commission, (SEC), finalized rules for delisting Chinese companies in December under the Holding Foreign Companies Accountable Act. It said that it had identified 273 companies at risk and did not name them.

Five of these companies were named by the SEC in a landmark announcement earlier this month. They include Yum China Holdings, a KFC restaurant operator (NYSE:), and Xe Biotech. BeiGene (NASDAQ:) Ltd could be delisted.

CSRC described the SEC’s move as “normal procedure” and said that it believed it could reach an agreement to resolve the issue with its counterparts in the United States.

Three sources confirmed that the Chinese regulators are still discussing additional audit disclosure with domestic listed companies in New York.

Washington long sought complete access to U.S.-listed Chinese businesses’ books, but Beijing, out of national security concern, prohibits foreign inspection of local accounting firms’ working papers.

A map on the website https://pcaobus.org/oversight/international of the Public Company Accounting Oversight Board (PCAOB), an auditor oversight body tasked to help keep publicly traded companies in the United States in check, showed China as the only jurisdiction that denied the organisation “necessary access to conduct oversight”.

Goldman Sachs, NYSE:), estimated that U.S. institutions had around $200 Billion of exposure to American deposits (ADRs) from Chinese companies on March 11.

Nearly 60% fell in the Nasdaq Gold Dragon China Index over the past twelve months.

China’s Vice Premier Liu He claimed last week that negotiations between U.S. and Chinese regulators for companies listed in the United States had made significant progress, and that both parties are currently in discussions about specific cooperation plans.