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President Trump Sets A Deadline To Review Chinese Companies Listed In The United States

President Trump Sets A Deadline To Review Chinese Companies Listed In The United States

US President Donald Trump has ordered regulators to propose ways to tighten oversight with Chinese companies listed in New York within the next 60 days.

"Although China has benefited from the US market, the Chinese government has repeatedly prevented Chinese companies and companies operating in China from complying with investor protections. This applies to all companies listed on the US stock exchange."
Mr. Trump said in a memorandum issued by the White House on Thursday 4th June, 2020.

Chinese companies' access to US capital markets has become the latest hot spot between Washington and Beijing as the two countries clash with Hong Kong's future, the Covid-19 pandemic, and trade, leading to a debate about "detachment" from the world's two largest economies.

Some Chinese tech companies are using Hong Kong as a secondary listing after the US Senate last month approved a bill that could force mainland companies to cancel listing if they don't comply with the standards. US regulations for 3 consecutive years. Foreign companies are currently subject to lower scrutiny.

On Friday 5th June, NetEase, China's second largest gaming company, offered 123 Hong Kong dollars ($ 15.86) per share. This means that the main phase of the stock sale will raise $ 2.7 billion for NetEase, the most of any company raised in Hong Kong earlier this year.

But that record may soon be lost., China's second largest online shopping platform, launched its own sale of shares in Hong Kong on Friday, looking to raise as much as $ 3 billion.

The United States has pointed to Chinese companies about suspicious accounting practices and lack of transparency. 

Attempts to crack down on Chinese companies have intensified with recent cases of alleged accounting fraud such as Luckin Coffee, acknowledging that senior employees fabricated sales figures.

US Secretary of State Mike Pompeo on Thursday urged exchanges around the world to tighten regulations on Chinese companies and increase scrutiny.

According to his memorandum, Trump ordered the president's working group on the financial market, chaired by Treasury Secretary Steven Mnuchin, to issue recommendations within 60 days of protecting investors from fraudulent practices at Chinese companies listed in the United States.

"We must take resolute, orderly action to end China's practice of ignoring US transparency requirements without negatively affecting US investors and financial markets." 
Mr. Trump said.

The memorandum states that the Chinese government has prevented auditing firms registered with the US Public Company Accounting Supervision Commission from checking auditing documents of listed companies.

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