Friday, President Trump signed legislation that will kick Chinese companies off US stock exchanges unless they adhere to American auditing standards.
The Holding Foreign Companies Accountable Act (The Act) bars securities of foreign companies from being listed on any US exchange if they have failed to comply with the US Public Accounting Oversight Board’s audits for 3 yrs running.
While it applies to companies from any and all country, the legislation intends to target Chinese companies listed in the US, such as Alibaba (NYSE:BABA), Pinduoduo (NASDAQ:PDD) and Crude Oil giant PetroChina Co ( NYSE:PTR).
The legislation takes a hard line on Chinese businesses.
Both Republican and Democrat have aligned with President Trump’s hard line against Beijing, which became fierce this year as The Trump Administration holds China responsible for the China Virus that has ravaged the US.
The Act also require public companies to disclose whether they are owned or controlled by a foreign government.
Chinese government officials dismiss The Act as a discriminatory and politically oppresses Chinese firms.
Beijing has been/is reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.
Have a healthy weekend, Keep the Faith!