Senate Passes Bill To Boot Rogue Chinese Companies from US Stock Exchange
The U.S. Senate is sending a message to China:
Either play by the rules or you’ll be asked to leave — in this case, the stock market.
Last week, the Senate, in a bipartisan effort, passed the Holding Foreign Companies Accountable Act, which would require companies on the U.S. exchanges to certify that they are not under the control of a foreign government.
“If a company can’t show that it is not under such control or the Public Company Accounting Oversight Board, or PCAOB, isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges,” Bloomberg reported.
Republican John Kennedy of Louisiana and Democrat Chris Van Hollen of Maryland co-sponsored the bill, which was introduced in March 2019 but has gained steam amid the coronavirus pandemic that originated in China.
Kennedy, who never minces words, said he believes China cheats when it comes to business.
The Chinese Communist Party cheats, and the Holding Foreign Companies Accountable Act would stop them from cheating on U.S. stock exchanges.
We can’t let foreign threats to Americans’ retirement funds take root in our exchanges. pic.twitter.com/71dYQxTgiR
— John Kennedy (@SenJohnKennedy) May 19, 2020
This bill would help bring the communist government’s shenanigans to an end.
The Senate’s action is a sign that anger and concern are percolating with some lawmakers toward China.
It’s clear that China cannot be trusted when it comes to business dealings and when it comes to health.
The Trump administration has been vocal that more could have been done to warn the world about the coronavirus after it emerged in the Chinese city of Wuhan.
Larry Kudlow, director of President Donald Trump’s National Economic Council, said the United States plans to hold the Chinese government accountable for the pandemic.
“On the China business, it’s up in the air. They are going to be held accountable for it. There’s no question about that. How, when, where and why — I’m going to leave that up to the president,” Kudlow told CNBC earlier this month.
Fox Business reported last week that “fraudulent listings of Chinese companies on U.S. markets have cost investors billions of dollars over the past decade.”
And on Friday, Luckin Coffee, a beverage chain based in China, was given notice that it will be delisted from Nasdaq soon after it announced its chief operating officer had inflated last year’s sales by hundreds of millions of dollars.
This only affirms Kennedy’s opinion that China doesn’t play fair.
“If you want to list on an American exchange, you have to submit an audit, and the SEC has the right to look at that audit, and audit the audit,” he said on the Senate floor, according to the Fox Business report. “And if you refuse not once, not twice, but three times — if over a three-year period, each of those three years, the company says, ‘You cannot audit my audit,’ then they can no longer be listed.”
If Chinese companies will mislead investors while its government officials fail to warn the world about a deadly virus, how can they be trusted in the U.S. financial markets?
To hold all companies on Wall Street and in the stock exchange to the same standards that American businesses are held to makes perfect sense and is long overdue.
The Chinese version of Starbucks saw its stock prices collapse after the COO was found to have fabricated sales figures.
That’s not accountability. China must be held responsible for its misdeeds, whether they involve the U.S. stock market or Americans’ lives.
Now let’s see if the House of Representatives will follow the lead of the Senate and pass the bill to send it to Trump for his signature.
That’s the right thing to do, and in the best interest of all Americans, and the world.
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