US SENATE PASSES A BILL TO DE-LIST CHINESE COMPANIES

US SENATE PASSES A BILL TO DE-LIST CHINESE COMPANIES FROM AMERICAN STOCK EXCHANGES

ABOUT THE US SENATE BILL 

The senate overwhelmingly approved legislation on 20th May, that could lead to Chinese companies like Alibaba group Holding Ltd. and Baidu Inc. being barred from listing on the U.S exchange amid increasingly tense relation between USA and China.The bill introduced by senator John Kennedy and Chris Van Hollen was approved by unanimous consent and would require companies to certify that they're not in check of a foreign government.

WHAT IS THE RULES IN US SENATE BILL ?

If a company doesn't fit according the Bill or the PCAOB isn’t able to audit the company for three consecutive years to confirm that it is not under the control of a foreign Govt., the company’s securities would be banned from the exchanges. The bill would apply to U.S. exchanges like Nasdaq therefore the NY Exchange market.

WHY US SENATE BILL INTRODUCED?

U.S. lawmakers have raised red flags over the billions of dollars flowing into a number of China’s largest corporations , much of it from pension funds and college endowments in search of fat investment returns. These technology giants aim to develop leading positions in everything from artificial intelligence to internet data collection Shares in some of the biggest U.S. listed Chinese firms , including Baidu and Alibaba, slid on 21 May in New York while the broader market gained.

HOUSE BILL 

Another companion bill introduced, consistent with which Nasdaq moved in the week to de-list China based Luckin Coffee after executives at the corporate admitted fabricating $310 million in sales between April and December 2019.

A separate Senate passed bill to sanction Chinese officials over human rights abuses against Muslim. At issue is China’s longstanding refusal to permit the PCAOB to look at audits of firms whose shares trade on the NY stock market , Nasdaq and other U.S. platforms.

CHINA WAS RAISING MONEY IN DOLLARS

Since then China and the U.S. have been at odds on the difficulty whilst companies including Alibaba and Baidu have raised billions of dollars selling shares in American markets .The long simmering feud came to the forefront last year as Washington and Beijing clashed over broader trade and economic issues, and a few in the White House are urging Trump to require a harder line on the audit inspections. This important legislation would protect American retail investors and pensioners from risky investments in fraudulent, opaque Chinese companies that are listed on U.S. exchanges and trade on over the counter markets.

“If Chinese companies want access to the U.S. capital markets, they need to suits American laws and regulations for financial transparency and accountability"

Tags: US senate passes bill, Pending bill in Congress,us senate passes Hong Kong bill,