Trading in shares of Chinese biotechnology company
was halted in Hong Kong amid a deep selloff Tuesday after the company was added to a U.S. “unverified list” that subjects foreign entities to tighter export controls.
The Jiangsu-headquartered company’s shares fell as much as 32% in early trading after the U.S. Commerce Department added two Wuxi Biologics units and 31 other Chinese entities to a list of organizations whose legitimacy it said it hasn’t been able to verify through end-use checks.
Others named on the list, which restricts an entity’s ability to receive U.S. exports, include businesses in electronics and optics as well as two universities.
Wuxi Biologics said that its addition to the list will have a “very minimal impact to our imports,” and wouldn’t affect its business or continuing services to global partners. It added that the pandemic has prevented the Commerce Department from conducting end-use checks at the company for the past two years, and said it welcomed inspection for removal from the list.
It also said it has been importing hardware controllers for bioreactors and hollow fiber filters that are subject to U.S. export controls but has received Commerce Department approval for the past 10 years and doesn’t re-export or resell the items.
The Commerce Department announced the additions Monday, saying it had been unable to establish the entrants’ “legitimacy and reliability” relating to the use of U.S. exports. Matthew Axelrod, assistant secretary for export enforcement, said that the move “will assist U.S. exporters in conducting due diligence and assessing transaction risk,” and send a signal to the Chinese government about the importance of its cooperation in scheduling end-use checks.
Shares of Wuxi Biologics were last down 23% to 62.25 Hong Kong dollars, equivalent to $7.99. That took their year-to-date losses to 33%.
Hong Kong-listed shares of Wuxi Apptec Co., the Shanghai-based pharmaceutical company that spun off Wuxi Biologics in 2015, were last 15% lower at HK$96.40.
Write to Yi Wei Wong at [email protected]
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