In this file:
· Senate moves to delist Chinese companies from US stock exchanges
· China Inc. rethinks US listings as scrutiny tightens
Senate moves to delist Chinese companies from US stock exchanges
Ben Werschkul, Yahoo Finance
May 20, 2020
The Senate passed a bill by unanimous consent on Wednesday to take on Chinese companies listed on U.S. exchanges.
The legislation would require the companies to submit to a range of stringent provisions to avoid being booted.
First, they must disclose whether they are owned or controlled by a foreign government. Second, and perhaps most intrusively, they would have to comply with audits from the Public Company Accounting Oversight Board (PCAOB) for three years in a row.
“We just want Chinese companies to play by the same rules as everybody else,” said Sen. Chris Van Hollen (D-MD) during an appearance on Yahoo Finance shortly after the bill passed (video above). “This is an important step forward for transparency,” he said.
Van Hollen has led the effort, known as the Holding Foreign Companies Accountable Act, along with Sen. John Kennedy (R-LA). A mix of other senators like Kevin Cramer of North Dakota, Bob Menendez of New Jersey and Marco Rubio of Florida are co-sponsors.
Currently, companies registered in China and Hong Kong are not subject to PCAOB audits.
A group known as the U.S.-China Economic and Security Review Commission has compiled a list of 156 Chinese companies that are currently listed on the biggest three U.S. stock exchanges. The list includes giants like Alibaba (BABA), Baidu (BIDU) and JD.com (JD).
Van Hollen says the legislation is “designed to protect investors” because the lack of transparency among Chinese companies “exposes American investors to unnecessary risks.”
“It’s asinine that we’re giving Chinese companies the opportunity to exploit hardworking Americans” added Senator Kennedy in a statement.
Washington itching to take on China ...
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China Inc. rethinks US listings as scrutiny tightens
Mainland exchanges roll out welcome mats while Wall Street shuts doors
Yusho Cho, Nikkei Asian Review
May 21, 2020
SHANGHAI -- Chinese enterprises have started reworking their fundraising strategies after encountering a less-welcoming environment for public offerings in the U.S.
The Luckin Coffee accounting scandal has reignited calls to step up scrutiny on initial public offerings in the U.S. by Chinese companies.
The U.S. Senate passed a bill on Wednesday that would require foreign companies listing in New York to be subject to oversight by U.S. auditing authorities, which Chinese law forbids. The bill, which has to be passed by the House of Representatives as well to become law, would also require listing candidates to show they are not controlled by a foreign government, also a key issue with Chinese companies.
Earlier this week, the Nasdaq Stock Market revealed plans to tighten listing rules in a way that will restrict Chinese access to the Wall Street bourse.
At the same time, Chinese authorities are encouraging a homecoming to mainland markets by easing restrictions on listings. Some domestic enterprises are switching their playbooks in line with that appeal.
Semiconductor Manufacturing International Corp. revealed plans this month to list on Shanghai's Science and Technology Innovation Board, also known as the STAR Market.
The contract chipmaker seeks to raise 25 billion yuan ($3.52 billion), which will be directed toward next-generation products. SMIC will boost this year's investment 30% to $4.3 billion, according to Co-CEO Zhao Haijun, with the listing covering part of that bill.
SMIC is currently traded solely in Hong Kong, having ended its double-listing on the New York Stock Exchange last year. The decision was made in the midst of U.S. sanctions imposed against Chinese telecommunications equipment suppliers ZTE and Huawei Technologies.
The Politburo under Chinese President Xi Jinping "has started considering how not to be too dependent on the U.S. on the capital front as well," said Zhou Yu, director of international finance at the Shanghai Academy of Social Sciences...
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