Alibaba Group Holding Ltd. is facing increased scrutiny and potential delisting from U.S. stock exchanges after being flagged by the U.S. Securities and Exchange Commission (SEC).

The SEC’s move stems from its inability to inspect audit work papers for three years in a row, as required by the Holding Foreign Companies Accountable Act (HFCAA). This law aims to ensure that foreign companies listed on U.S. exchanges comply with U.S. auditing standards.

The inclusion of Alibaba on the list has triggered concerns among investors about the future of Chinese companies listed in the United States. Other companies have also been added to the list, increasing the pressure on Beijing and Washington to reach an agreement on audit inspections.

If a resolution is not reached, Alibaba and other listed Chinese companies could face delisting from U.S. exchanges, potentially impacting their access to capital and investor confidence.

The situation remains fluid, and the outcome will depend on ongoing negotiations between U.S. and Chinese regulatory bodies.