Posted on 12/02/2020 4:32:53 PM PST by Zhang Fei
WASHINGTON (Reuters) - The U.S. House of Representatives passed legislation on Wednesday that could prevent Chinese companies from listing their shares on U.S. exchanges unless they adhere to U.S. auditing standards.
The measure passed by unanimous voice vote, after passing the Senate earlier this year, sending it to the White House which said President Donald Trump is expected to sign it into law.
“The Holding Foreign Companies Accountable Act” bars securities of foreign companies from being listed on any U.S. exchange if they have failed to comply with the U.S. Public Accounting Oversight Board’s audits for three years in a row.
While it applies to companies from any country, the legislation targets Chinese companies such as Alibaba, tech firm Pinduoduo Inc. and oil giant PetroChina Co Ltd..
Measures taking a harder line on Chinese business and trade practices generally pass Congress with large margins, as both Democrats and Trump’s fellow Republicans echo the president’s hard line against Beijing.
Democratic Senator Chris Van Hollen, who co-authored the bill with Republican Senator John Kennedy, said in a statement that American investors “have been cheated out of their money after investing in seemingly-legitimate Chinese companies that are not held to the same standards as other publicly listed companies.”
Kennedy said China was using U.S. exchanges to “exploit” Americans. “The House joined the Senate in rejecting a toxic status quo,” he said in a statement.
The act would also require public companies to disclose whether they are owned or controlled by a foreign government.
Greater scrutiny could also deter other Chinese firms from listing in the United States, say industry participants. Such listings reached a six-year high this year.
INTERNATIONAL DISAGREEMENTS
Chinese foreign ministry spokeswoman Hua Chunying said before the vote that it was a discriminatory policy that politically oppresses Chinese firms.
(Excerpt) Read more at reuters.com ...
Anyway, the Chinese exception to financial audit rules may be on its way out. The practical effect? The market caps of Chinese companies on foreign exchanges are about to shrink drastically, limiting the amount of money they can raise to finance their expansion. Institutional investors will find a way to invest in Chinese names, but many retail US investors will be spared the opportunity as well as the risk in those companies.
That is all very well, but the American investors who own large stakes in these companies will be pretty ticked off at all the money they’re going to lose.
[That is all very well, but the American investors who own large stakes in these companies will be pretty ticked off at all the money they’re going to lose.]
How about a law that prohibits ChiCom companies doing business in the US, period.
Thanks to President Trump, I hope!
Now we just need a bill that states that election and ballot counts must follow all accounting standards. In other words, no false data allowed and gee, things must balance. You know, basic math and stuff like that.
This is an outstanding development.
But it’s curious to me why the Democrats are supporting it. Did Pelosi go for it? This hurts her buddy President Xi.
Time to really squeeze the Chinese. Best case scenario is they open up Hong Kong again.
By voting to support this bill the Democrats are trying to seem anti-Chinese business practices so that they don’t get investigated for their own ties to them.
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