Due to this SEC investigation and XIN's use of Ernst and Young as an auditor, a lot of irrational (and often purposefully exaggerated) statements about XIN have recently been made. In the midst of all the hype, investors should take a careful, sober look at the recent news articles regarding the SEC investigation and E&Y, and then ask themselves what can reasonably be inferred and what the likely short-term and long-term outcomes are.
There is no evidence indicating that XIN will be singled out in any SEC investigation, and compared to the other Chinese companies listed in the US market (admittedly not a high standard), XIN looks honest and clean. Without specific evidence of wrongdoing on the part of XIN, perhaps the only thing that could lead to XIN's delisting would be the delisting of Chinese companies en masse due to a complete breakdown in negotiations between US and Chinese regulators over financial data disclosure. Given the large negative effect this would have on both the US and Chinese economies at a time period when all things economic seem to be unstable, I think the possibility of this outcome is nil. The likely goals of this investigation and the steps that will follow are to make auditors double up on their efforts to obtain the financial data the SEC wants, to stop being complicit in fraudulent behavior, to deter fraudulent behavior on the part of Chinese companies, and pressure Chinese regulators to allow Chinese companies to release more financial data -- all good things if XIN is an honest company. No one wants all Chinese companies to be delisted, not even the SEC. As a result of this SEC investigation, if E&Y were found to have committed truly serious transgressions, perhaps the worst thing that could happen to XIN is that it would be compelled to use a different auditor, which would cause XIN's financial doings to appear less transparent. (Personally, I wish XIN would use the current situation as an excuse to issue a statement reassuring investors that its financial info is clean and that it intends to comply with SEC financial data disclosure rules to the extent that Chinese law will allow, but of course this is just wishful thinking. They're probably ecstatic about the price drop since it enables them to buy back shares more cheaply.)
Below are some recent articles about the SEC investigation and about Ernst and Young.
1. "The SEC's Latest Move Could Spell The Demise Of Chinese Companies Getting Listed In The United States," from the businessinsider.
2. "SEC charges China affiliates of top accounting firms," from Yahoo.
3. "Ernst & Young to Pay $117 Million to Settle Sino-Forest Claim," from Bloomberg.
What you said regarding companies being listed on stock exchanges is true; however, Xinyuan is carrying out a buyback, so if they're confident that at some point in the future they'll be recognized as a sound, legitimate company by US investors, I doubt they're fretting much over the current low price. They're probably glad that they can buy more shares back at abnormally cheap prices for a bit longer. Then, in the future, if and when the price appreciates to a level on par with that of other developers' stock prices, XIN's book value will increase more than it otherwise would (i.e., more than if they had bought shares at a higher price).