Bill that could delist Chinese companies from U.S. stock exchanges to see 'swift passage' in House, analyst says

  
Via:  Nerm_L  •  one week ago  •  9 comments

By:   Chris Matthews (MarketWatch)

Bill that could delist Chinese companies from U.S. stock exchanges to see 'swift passage' in House, analyst says
Momentum is building for the House of Representatives to approve sweeping legislation that could ultimately bar many Chinese companies from listing shares on...

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As expected, House Speaker Nancy Pelosi is dragging her feet because "we have to have a relationship with China."  Of course, Pelosi won't explain what type of relationship that would be.


S E E D E D   C O N T E N T



Momentum is building for the Democratic-run House to approve sweeping legislation that could ultimately bar many Chinese companies from listing their shares on U.S. stock exchanges or otherwise raising money from American investors.

Democratic Rep. Brad Sherman of California introduced a House version of the Holding Foreign Companies Accountable Act Wednesday night, after the bill passed the Republican-controlled Senate earlier in the day with unanimous support.

The bill would require that foreign companies let the Public Company Accounting Oversight Board oversee the auditing of their financial records if they want to raise money by selling stocks or bonds to the American public. All U.S. companies and most foreign firms already work with the PCAOB in this way, but Chinese firms do not.

Henrietta Treyz, director of economic policy at Veda Partners, said investors should "expect swift passage" of the bill "likely before the end of the month" in a Thursday note to clients. "From there, it will go to President Trump's desk, where he will sign it into law, likely within the next few weeks."

There was a possibility that the House Financial Services Committee would amend the Senate bill, but that didn't happen and it suggests broad support for the bill, Treyz added.

Sherman cited the example of Luckin Coffee Inc. LK, -28.99% , which revealed in April that it had fabricated 2019 sales figures and was being investigated by Chinese securities regulators. The company's Nasdaq-listed stock has plunged from a high of $50 in mid-January to trade under $3 on Thursday. "Had this legislation already been signed into law, U.S. investors in Luckin Coffee would have avoided billions of dollars in losses," the congressman said in a news release.

Other analysts see the bill potentially moving more slowly.

"There are three possible choices for how the House will proceed­­­: Quickly pass the bill as written, delay consideration until later in the summer, or pass an amended version which would then necessitate either Senate approval or a conference committee," wrote Clayton Allen, senior vice president of trade, policy and geopolitical risk at Height Capital Markets. Allen added that President Donald Trump may prefer some delay for the bill, in order to reserve it as leverage over Beijing in future negotiations.

Democratic House Speaker Nancy Pelosi of California said Thursday afternoon on Bloomberg Television that she has asked House committees to review the legislation. "I take second place to no one in the Congress, House or Senate, in my criticisms of China's trade policies vis-a-vis the United States over decades," she said. "But the fact is we have to have a relationship with China."

White House economic adviser Larry Kudlow told Fox Business Network on Tuesday that "we have to" push for more accountability from Chinese companies listed on U.S. markets.

"We have to for investor protection, and we have to for national security," Kudlow said. "A lot of these companies, by the way, have already had scandals and cost investors a lot of money, because of their failure to be transparent in their reporting. The Chinese government forbids that kind of transparency."

The SEC said in 2018 that there are 224 listed companies with $1.8 trillion in combined market capitalization "where the PCAOB faces obstacles in inspecting the principal auditors' work."

The U.S.-China Economic and Security Review Commission compiled a list in 2019 of 156 Chinese companies that are listed on U.S. stock exchanges, including Alibaba Group Holding Ltd. BABA, -4.93% , Baidu Inc. BIDU, -5.15% and JD.com Inc. JD, -4.96% , all of which could be at risk of being delisted if this legislation were to pass.

— Victor Reklaitis contributed to this report


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Nerm_L
1  seeder  Nerm_L    one week ago

Nancy Pelosi seems more concerned about California real estate developers selling to Chinese buyers.  What type of business does Paul Pelosi run?

 
 
 
Heartland American
1.1  Heartland American  replied to  Nerm_L @1    one week ago

It’s her husbands business the ice cream princess is associated with.  

 
 
 
Paula Bartholomew
1.2  Paula Bartholomew  replied to  Nerm_L @1    one week ago

I hope that The Turtle's wife gets torpedoed if this happens.

 
 
 
Heartland American
2  Heartland American    one week ago

This bill needs to pass immediately.  A most important must pass bill.  

 
 
 
XDm9mm
3  XDm9mm    one week ago

Delist them all.

China is the quiet enemy of every country.

Americans, Buy American from American owned and operated companies or if not possible, from friendly allies.  Shun anything and everything that says "Made in China" or as we often now see "Heche en China".

 
 
 
Ed-NavDoc
3.1  Ed-NavDoc  replied to  XDm9mm @3    one week ago

Agreed. We need to get rid of any Chinese Communist influence in our country and it's affairs once and for all! 

 
 
 
XDm9mm
3.1.1  XDm9mm  replied to  Ed-NavDoc @3.1    one week ago
We need to get rid of any Chinese Communist influence in our country and it's affairs once and for all! 

At least Trump has put an end to the TSP funding Communist China with American federal employees retirement funds.   The repatriation of those billions of dollars and reinvestment into American companies will come at a great time.   They'll be able to but low and watch them grow as America rebuilds after the Communist Chinese Virus (politely referred to by many as COVID19) has wrecked it's havoc.

 
 
 
Nerm_L
3.2  seeder  Nerm_L  replied to  XDm9mm @3    one week ago
Delist them all.

China is the quiet enemy of every country.

Americans, Buy American from American owned and operated companies or if not possible, from friendly allies.  Shun anything and everything that says "Made in China" or as we often now see "Heche en China".

The big revelation in the seeded article is that China has not been required to play by the rules.  As the article states, "All U.S. companies and most foreign firms already work with the PCAOB in this way, but Chinese firms do not."

 
 
 
Tacos!
3.2.1  Tacos!  replied to  Nerm_L @3.2    one week ago
China has not been required to play by the rules

That is always the problem with China. They are never required to play by the same rules as everyone else. Never held accountable. And no one wants to get tough with them because they have convinced themselves they "need" China. They don't, though.

 
 
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