Chindata Group Provides Update on its Status under the Holding Foreign Companies Accountable Act

Rhea-AI Summary

Chindata Group Holdings Limited (Nasdaq: CD) announced that it was provisionally named by the SEC as a Commission-Identified Issuer under the HFCAA on May 4, 2022. This designation indicates that the Company utilized a registered public accounting firm whose working papers the PCAOB cannot fully inspect. Per HFCAA regulations, if a company is identified for three consecutive years, its shares may be prohibited from trading in the U.S. Chindata Group will actively explore options to protect stakeholder interests.

Positive

• Chindata Group is a leading provider in the hyperscale data center market, indicating a strong business foundation.
• The Company operates in key economic areas like Greater Beijing and aims to expand its presence in other Asia-Pacific regions.

Negative

• Being designated a Commission-Identified Issuer by the SEC poses risks of trading restrictions under the HFCAA.
• If identified for three consecutive years, the Company could face trading prohibitions in the U.S., affecting shareholder value.

BEIJING, May 05, 2022 (GLOBE NEWSWIRE) -- Chindata Group Holdings Limited (“Chindata Group” or the “Company”) (Nasdaq: CD), a leading carrier-neutral hyperscale data center solution provider in Asia-Pacific emerging markets, today announced that the Company is aware of the fact that it was provisionally named by the United States Securities and Exchange Commission (the "SEC") as a Commission-Identified Issuer under the Holding Foreign Companies Accountable Act of the United States (the "HFCAA") on May 4th, 2022, following the Company's filing of the annual report on Form 20-F for the fiscal year ended December 31, 2021 with the SEC on April 29, 2022.

The Company understands that the SEC made such identification pursuant to the HFCAA and its implementation rules issued thereunder. This indicates that the SEC has determined the Company used a registered public accounting firm, whose working paper cannot be inspected or investigated completely by the Public Company Accounting Oversight Board of the United States (the "PCAOB"), to issue the audit opinion for the Company's financial statements for the fiscal year ended December 31, 2021.

In accordance with the HFCAA, the SEC shall prohibit a company’s shares or American depositary shares (“ADSs”) from being traded on a national stock exchange or in the over-the-counter trading market in the United States if the company has been identified by the SEC for three consecutive years due to PCAOB’s inability to inspect the auditor’s working paper.

The Company will continue to monitor market developments and actively explore all strategic options to protect the interests of its stakeholders.

About Chindata Group

Chindata Group is a leading carrier-neutral hyperscale data center solution provider in Asia-Pacific emerging markets and a first mover in building next-generation hyperscale data centers in China, India and Southeast Asia markets, focusing on the whole life cycle of facility planning, investment, design, construction and operation of ecosystem infrastructure in the IT industry. Chindata Group provides its clients with business solutions in major countries and regions in Asia-Pacific emerging markets, including asset-heavy ecosystem chain services such as industrial bases, data centers, network and IT value-added services.

Chindata Group operates two sub-brands: "Chindata" and "Bridge Data Centres". Chindata operates hyper-density IT cluster infrastructure in the Greater Beijing Area, the Yangtze River Delta Area and the Greater Bay Area, the three key economic areas in China, and has become the engine of the regional digital economies. Bridge Data Centres, with its top international development and operation talents in the industry, owns fast deployable data center clusters in Malaysia and India, and seeks business opportunities in other Asia-Pacific emerging markets.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the business outlook and quotations from management in this announcement, as well as Chindata Group’s strategic and operational plans, contain forward-looking statements. Chindata Group may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Chindata Group’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Chindata Group’s goals and strategies; its future business development, financial condition and results of operations; the expected growth and competition of the data center and IT market; its ability to generate sufficient capital or obtain additional capital to meet its future capital needs; its ability to maintain competitive advantages; its ability to keep and strengthen its relationships with major clients and attract new clients; its ability to locate and secure suitable sites for additional data centers on commercially acceptable terms; government policies and regulations relating to Chindata Group’s business or industry; general economic and business conditions in the regions where Chindata Group operates and globally and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Chindata Group’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Chindata Group undertakes no obligation to update any forward-looking statement, except as required under applicable law.

For Enquiries, Please Contact:

Chindata IR Team
ir@chindatagroup.com

FAQ

What does it mean for Chindata Group to be a Commission-Identified Issuer under the HFCAA?

It means the SEC has identified the Company due to its audit not being fully inspectable by the PCAOB, which raises potential trading risks.

What are the implications of being named a Commission-Identified Issuer for Chindata Group (CD)?

If identified for three years, Chindata Group's shares may be prohibited from trading in U.S. markets, impacting liquidity and shareholder value.

When was Chindata Group identified by the SEC as a Commission-Identified Issuer?

Chindata Group was identified on May 4, 2022.

How can Chindata Group protect its shareholders after being named by the SEC?

The Company plans to explore strategic options and monitor market developments actively.