TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      South Africa’s ‘silent revolution’ as those with cash go solar

      15 August 2022

      SA coal giant Seriti Resources in pivot to renewables

      15 August 2022

      Tencent, TikTok share details of prized algorithms with Beijing

      15 August 2022

      Fixing SA’s power crisis is not complex: it simply takes the will to do better

      12 August 2022

      Consortium makes unsolicited bid for state’s 40% stake in Telkom

      12 August 2022
    • World

      Institutions eye crypto but retail investors remain nervous

      15 August 2022

      Tencent woes mount, even after $560-billion selloff

      12 August 2022

      Huawei just booked its first sales rise since US blacklisting

      12 August 2022

      Apple remains upbeat about iPhone sales even as Android world suffers

      12 August 2022

      Ether at two-month high as upgrade to blockchain passes major test

      12 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»Investment»Senate passes bill to delist Chinese companies from US exchanges

    Senate passes bill to delist Chinese companies from US exchanges

    Investment By Agency Staff21 May 2020
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    The US senate overwhelmingly approved legislation on Wednesday that could lead to Chinese companies such as Alibaba Group and Baidu being barred from listing on US stock exchanges amid increasingly tense relations between the world’s two largest economies.

    The bill, introduced by senator John Kennedy, a Republican from Louisiana, and Chris Van Hollen, a Democrat from Maryland, was approved by unanimous consent and would require companies to certify that they are not under the control of a foreign government.

    US lawmakers have raised red flags over the billions of dollars flowing into some of China’s largest corporations, much of it from pension funds and college endowments in search of fat investment returns. Alarm has grown in particular that American money is bankrolling efforts by the country’s technology giants to develop leading positions in everything from artificial intelligence and autonomous driving to Internet data collection.

    I’m proud that we were able to pass it today with overwhelming bipartisan support, and I urge our house colleagues to act quickly

    Shares in some of the biggest US-listed Chinese firms, including Baidu and Alibaba, slid on Thursday in New York while the broader market gained.

    If a company can’t show that it is not under such control or the Public Company Accounting Oversight Board isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges.

    “I do not want to get into a new Cold War,” Kennedy said on the senate floor, adding that he wants “China to play by the rules”.

    ‘Transparency’

    “Publicly listed companies should all be held to the same standards, and this bill makes common-sense changes to level the playing field and give investors the transparency they need to make informed decisions,” Van Hollen said in a statement. “I’m proud that we were able to pass it today with overwhelming bipartisan support, and I urge our house colleagues to act quickly.”

    In a sign of broad support for the measure, representative Brad Sherman, a California Democrat on the house financial services committee, introduced a companion bill in that chamber. Sherman said in a statement that Nasdaq moved this week to delist China-based Luckin Coffee after executives at the company admitted fabricating US$310-million in sales between April and December 2019.

    “I commend our senate counterparts for moving to address this critical issue,” Sherman said. “Had this legislation already been signed into law, US investors in Luckin Coffee likely would have avoided billions of dollars in losses.”

    House leaders are discussing the legislation — and a separate senate-passed bill to sanction Chinese officials over human rights abuses against Muslim minorities — with lawmakers and members of the relevant committees, a Democratic aide said.

    The senate measure is an example of the rising bipartisan pushback against China in congress that had been building over trade and other issues. It has been amplified especially by Republicans as President Donald Trump has sought to blame China as the main culprit in the coronavirus pandemic.

    GOP lawmakers have in recent weeks unleashed a torrent of legislation aimed at punishing China for not being more forthcoming with information or proactive in restricting travel as the coronavirus began to spread from the city of Wuhan, where it was first detected.

    I would not turn my back on the Chinese Communist Party if they were two days dead. They cheat. And I’ve got a bill to stop them from cheating

    Trump escalated his rhetoric against China on Wednesday night, suggesting that leader Xi Jinping is behind a “disinformation and propaganda attack on the United States and Europe”.

    “It all comes from the top,” Trump said in a series of tweets. He added that China was “desperate” to have former vice President Joe Biden win the presidential race.

    Kennedy told Fox Business on Tuesday that the bill would apply to US exchanges such as Nasdaq and the New York Stock Exchange.

    “I would not turn my back on the Chinese Communist Party if they were two days dead,” Kennedy said. “They cheat. And I’ve got a bill to stop them from cheating.”

    At odds

    At issue is China’s longstanding refusal to allow the PCAOB to examine audits of firms whose shares trade on the New York Stock Exchange, Nasdaq and other US platforms. The inspections by the little-known agency, which congress stood up in 2002 in response to the massive Enron accounting scandal, are meant to prevent fraud and wrongdoing that could wipe out shareholders.

    Since then, China and the US have been at odds on the issue even as companies including Alibaba and Baidu have raised billions of dollars selling shares in American markets. The long-simmering feud came to the forefront last year as Washington and Beijing clashed over broader trade and economic issues, and some in the White House have been urging Trump to take a harder line on the audit inspections.

    Last week, Trump said in an interview on Fox Business that he’s “looking at” Chinese companies that trade on ⁦the NYSE and Nasdaq exchanges but do not follow US accounting rules. Still, he said that cracking down could backfire and simply result in the firms moving to exchanges in London or Hong Kong.

    While not technically part of the government, the PCAOB is overseen by the Securities and Exchange Commission. The ability to inspect audits of Chinese firms that list in the US is certain to come up at a roundtable that the SEC is holding on 9 July on risks of investing in China and other emerging markets.

    Senators Kevin Cramer, Tom Cotton, Bob Menendez, Marco Rubio and Rick Scott are also sponsors of the bill. Rubio applauded the passage of the Kennedy-Van Hollen bill and said it incorporated aspects of a similar bill he introduced last year.

    “I was proud to work with senator Kennedy on this important legislation that would protect American retail investors and pensioners from risky investments in fraudulent, opaque Chinese companies that are listed on US exchanges and trade on over-the-counter markets,” Rubio said in a statement. “If Chinese companies want access to the US capital markets, they must comply with American laws and regulations for financial transparency and accountability.”

    According to the SEC, 224 US-listed companies representing more than $1.8-trillion in combined market capitalisation are located in countries where there are obstacles to PCAOB inspections of the kind this legislation mandates.  — Reported by Daniel Flatley and Ben Bain, (c) 2020 Bloomberg LP

    Alibaba Baidu Chris Van Hollen Donald Trump John Kennedy
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleHow Cape Town hopes to wean itself off reliance on Eskom
    Next Article Facebook shares surge to record high despite pandemic

    Related Posts

    Seven reasons your business needs IP surveillance cameras

    15 August 2022

    South Africa’s ‘silent revolution’ as those with cash go solar

    15 August 2022

    SA coal giant Seriti Resources in pivot to renewables

    15 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Seven reasons your business needs IP surveillance cameras

    15 August 2022

    5G your life for faster, more reliable home or mobile connectivity

    15 August 2022

    World’s fastest compact firewall for hyperscale data centres, 5G networks

    15 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.