Senate bill bars Chinese companies that lie about finances from participating on U.S. exchanges
The bill applies to all foreign companies, but specifically targets the behavior of China.
May 21, 2020 - 1:01pm
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The Senate has passed a bipartisan measure that could prevent several Chinese companies from participating on the U.S. stock exchanges if they fail to amend their standards in accordance with U.S. audits and regulations.
The legislation, which was passed Wednesday by unanimous consent, was championed by Sen. John Kennedy, a Louisiana Republican, and Sen. Chris Van Hollen, a Maryland Democrat. The bill, if signed into law, would require public companies to disclose whether they are owned or controlled in any capacity by a foreign government.
The bill, titled the Holding Foreign Companies Accountable Act, would bar companies from being listed on any U.S. securities exchange if they have failed to meet the U.S. Public Company Accounting Oversight Board’s audits for several years in a row.
The measure applies to all foreign companies, but will specifically impact China, with whom U.S. tensions have rapidly been escalating since the beginning of the global pandemic.
“For too long, Chinese companies have disregarded U.S. reporting standards, misleading our investors,” said Van Hollen.
This bill comes several days after Just the News reported that Chinese companies continue to misreport financial data, which in turn misleads American investors, despite an Obama-era stock market deal designed to increase transparency.
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