Trump Signs Bill That Could See Chinese Firms Delisted From US Exchanges
President Donald Trump on Dec. 18 signed into law bipartisan legislation that forces foreign companies listed on American exchanges to observe U.S. accounting rules a move that could see Chinese companies delisted from U.S. exchanges.
The Holding Foreign Companies Accountable Act will require Chinese companies to comply with U.S. auditing and reporting standards or face exclusion from U.S. stock exchanges. The bill was passed unanimously in the House earlier this month and passed in the Senate by unanimous consent in May.
Under the law, foreign companies that fail to comply with the Public Company Accounting Oversight Board’s (PCAOB’s) audits for three consecutive years will be subject to delisting from U.S. exchanges. The rule also applies to companies whose shares are traded over the counter.
By Jaclyn Jaeger2020-12-17T19:44:00+00:00
China-based Luckin Coffee has agreed to a $180 million penalty as part of a settlement with the U.S. Securities and Exchange Commission to resolve charges related to the coffee chain’s inflated-sales scandal.
From at least April 2019 through January 2020, Luckin intentionally fabricated approximately $311 million in retail sales transactions “in an effort to falsely appear to achieve rapid growth and increased profitability and to meet the company’s earnings estimates,” according to the SEC’s complaint, filed Wednesday in the Southern District of New York.
Certain executive officers and senior managers at Luckin attempted to conceal the fraud by inflating the company’s expenses by more than $190 million, creating a fake operations database, and altering accounting and bank records to hide the misconduct from the company’s finance department and others, the complaint states.
The Straits Times
Investors swap China holdings from Wall Street to Hong Kong as delisting threat brews
US-listed firms including Alibaba, JD.com , NetEase, Yum China and New Oriental have already floated in Hong Kong.PHOTO: REUTERS
PublishedDec 14, 2020, 7:11 am SGT
https://str.sg/JaWm
They can read the article in full after signing up for a free account.
Share link:
Or share via:
Sign up or log in to read this article in full
Sign up
All done! This article is now fully available for you
Read now
Get unlimited access to all stories at $0.99/month for the first 3 months.
Order Reprints Print Article
A worker at an automatic sorting machine for e-commerce giant JD.com, which is among the Chinese companies that might not be able to trade in the U.S. in three years. Kevin Frayer/Getty Images Text size
Individual investors who own Chinese stocks listed in the U.S. could see the most disruption from recent legislation that paves the way for delisting Chinese companies within three years a potential unintended consequence of a push aimed at protecting investors.
A lot is still unclear on how the Securities and Exchange Commission may implement the Holding Foreign Companies Accountable Act, which passed with bipartisan support and is expected to be signed by President Donald Trump. If U.S. and Chinese regulators don’t come to a compromise around longstanding audit and disclosure issues, U.S.-listed Chinese companies may need to find a new home and investors will have to decide if they should follow.
Investors swap China holdings from Wall St to Hong Kong as delisting threat brews businesstimes.com.sg - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from businesstimes.com.sg Daily Mail and Mail on Sunday newspapers.