As Many As 217 Chinese Companies Could Be Delisted

Matty-Sways

Donald Trump signed a bill calling for the delisting of foreign companies that don't adhere to the same accounting as US

The President wants foreign companies to adhere to the same accounting standards as public U.S. firms and has signed a bill calling for the delisting of those companies who don't. The Holding Foreign Companies Accountable Act takes aim at Chinese companies and drew rare strong bipartisan support in the U.S. Congress before arriving on Trump's desk (bill could affect 217 Chinese companies). The act says delisting could happen if a company fails to comply with audit inspections three years in a row.

U.S.-listed companies are required to have audit inspections by the Public Company Accounting Oversight Board (put in place after accounting scandals like Enron in the early 2000s). However Chinese companies listed in the U.S. don't adhere to these inspections and have had major financial scandals as recently as this year (Luckin Coffee). Sixteen Chinese companies have delisted since February 2019.

The biggest companies that could be affected are:

  1. Alibaba Group Holding Ltd (BABA)

  2. JD.Com Inc (JD)

  3. Nio Inc (NIO)

  4. Xpeng Inc (XPEV)

  5. Li Auto Inc. (LI)

Carson Block, who has made himself a short-selling star through his investigations into Chinese companies, has called for the delisting of Chinese firms, saying to Bloomberg last month: "This is China and the Chinese stock promotion, manipulation fraud machine laughing in the face of the SEC."

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Comments (1)
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FrankSterleJr
FrankSterleJr

In China the government basically controls the corporations, whereas Western virtual-corpocratic governances, notably the U.S. and Canada, are basically steered by corporations’ economic intimidation or extortion.

Perhaps we Western folk should take note and follow the Chinese practice?

Nah. We’ll just stick to our elected governments habitually kowtowing to the very wealthy but especially big business’s debilitating threats, implied or explicit, of job losses, capital investment relocation and/or economic instability—thus electoral defeat.

Lobbyists will write bills for governing representatives to vote for and implement, often word for word.

There are also the annual subsidies doled to profitable corporations and the forgiveness of huge loans owed to taxpayers.

And, of course, almost all information is produced and/or shared with us by corporate-owned media.


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