President Donald Trump has set a 60-day deadline for US financial regulators to recommend ways to crack down on Chinese companies listed in America that fail to abide by proper accounting standards, reported the Financial Times.
Trump said in a memorandum that he was instructing the presidential working group on financial markets — which includes Steven Mnuchin, the US Treasury secretary; Jay Powell, the Federal Reserve chairman; Jay Clayton, the chairman of the Securities and Exchange Commission; and Heath Tarbert, the chairman of the Commodity Futures Trading Commission — to suggest actions the executive branch could take to curb certain Chinese listings in the next two months.
US officials have been particularly concerned that the Chinese government is preventing auditing firms from providing the US Public Company Accounting Oversight Board, or PCAOB, with the paperwork it requires for auditing inspections of companies listed in the US. This year’s accounting scandal involving Luckin Coffee, a Chinese company that listed in the US in 2019, further exacerbated those worries.
“China’s actions to thwart our transparency laws raise significant risks for investors. The time has come to take firm action in an orderly fashion to put an end to the practice that has tacitly permitted companies with significant Chinese operations to flout protections United States law requires for investors in United States markets,” Trump said.