Congress Sets Stage for Exiling Chinese Stocks from U.S. Over Audit Dispute
December 02 2020 - 05:24PM
Dow Jones News
By Dave Michaels and Alexander Osipovich
WASHINGTON -- The House unanimously approved legislation on
Wednesday that threatens a trading ban of shares of Chinese
companies, such as Alibaba Group Holding Ltd., over concerns that
their audits aren't sufficiently regulated.
The bipartisan measure passed the Senate in May and could
quickly become law with President Trump's signature. The fight over
China's resistance to allowing overseas inspections of its
companies' audits has lasted for years, but reached a fever pitch
during the Trump administration.
Under the measure, Chinese companies and their auditors would
have three years to comply with the inspections before a trading
prohibition could take effect. If a breakthrough looked unlikely,
the companies would likely respond ahead of a ban by either going
private or moving their listing to a non-U.S. exchange.
U.S. regulators are working on another proposal that could allow
Chinese auditors to comply with the inspection requirement without
violating their home country's laws, which limit the sharing of
information. The Securities and Exchange Commission could issue
such a proposal this month, although it would not immediately take
effect.
Write to Dave Michaels at dave.michaels@wsj.com and Alexander
Osipovich at alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
December 02, 2020 17:09 ET (22:09 GMT)
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