Last week US senate passed a bill to potentially delist Chinese companies from American stock exchange if these companies do not comply with the “Holding Foreign Companies Accountable Act” for three consecutive years.
The Public Company Accounting Oversight Board’s (PCAOB) will enact the act to ensure audits of foreign US listed firms to be accurate and transparent. These firms are also require to declare if they are owned or controlled by a foreign government, including China’s communist government.
As it stand now, Chinese government refuses to allow PCAOB in inspect audits of companies that are registered in China and Hong Kong. The recent delisting of Chinese company Luckin coffee whose fraudulent accounting came to light is one of the triggering factors. But more evidently, it is US targeting China in their ongoing trade wars.
According to SEC, more than 224 foreign US-listed companies, mostly Chinese with