Congress has passed legislation that would force Chinese companies to delist from American exchanges unless they comply with US accounting rules, reported the Financial Times.
The Holding Foreign Companies Accountable Act requires Chinese companies to give the US Public Company Accounting Oversight Board access to audited accounts — something that is currently prohibited by Beijing. It would also force companies listed on US exchanges to prove that they are not controlled by a foreign government, said the FT.
“I am pleased Congress has acted with strong bipartisan support to level the playing field for all issuers in our markets,” Jay Clayton, the SEC chairman, said on Wednesday following the passage of the bill. “Today’s vote, in combination with the commission’s ongoing work, will help address these longstanding issues for the benefit of US investors.” The American Securities Association also welcomed the legislation. “For far too long, the Chinese Communist party has exploited American investors to finance its cyber army, its technology-driven elimination of civil liberties, its human rights abuses, and its destruction of the environment,” said Chris Iacovella, the ASA’s chief executive.