SEC Chairman Warns Chinese Companies to Play by Rules or Face Delisting
The U.S. Public Company Accounting Oversight Board (PCAOB), the China Securities Regulatory Commission, and the Ministry of Finance have reached an agreement on the audit supervision of Chinese concept stocks, which Chinese media described as “great news for investors.” However, the SEC chairman warned that Chinese companies still face the risk of delisting if they don’t follow the rules.
On Aug. 26, SEC Chairman Gary Gensler issued a statement saying: “This agreement marks the first time we have received such detailed and specific commitments from China that they would allow PCAOB inspections and investigations meeting U.S. standards.”
However, the China Securities Regulatory Commission put forward various restrictions. An official, when answering reporters’ questions about the agreement, stated that the original working documents to be audited and other documents that the U.S. side asks to review are “obtained and provided through the assistance of the Chinese regulatory agency … and special processing procedures have been set up for specific data such as personal information.”
It is clear from Gensler’s statement that he is prepared for any cunning tricks from the Chinese authorities.
“Make no mistake, though: The proof will be in the pudding,” he said. “While important, this framework is merely a step in the process. This agreement will be meaningful only if the PCAOB actually can inspect and investigate completely audit firms in China. If it cannot, roughly 200 China-based issuers will face prohibitions on trading of their securities in the U.S. if they continue to use those audit firms.”
CCP’s Delaying Tactics
Jun Davy Huang, a Chinese economist based in the United States, told The Epoch Times that the Chinese Communist Party (CCP) is using a delaying tactic to gain advantage for itself.
“On the surface, the CCP agrees to meet the SEC’s requirements, but in terms of detailed operations,
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