Senate passes bill to delist Chinese companies from U.S. stock exchanges

Senate passes bill to delist Chinese companies from exchanges

The Senate passed legislation that would increase oversight of Chinese companies trading in American markets and could lead to them being booted from USA financial exchanges, according to reports.

Shares of Chinese e-commerce giant Alibaba saw its US-listed shares fall more than 2 per cent on the development.

The legislation requires companies to certify that they are not owned or controlled by a foreign government.

The bill also comes in the backdrop of the Luckin Coffee incident, wherein the company falsified $310 million in sales and received a delisting notice on May 19. China is expected to react sharply to the move. "China is on a glidepath to dominance and is cheating at every turn", Kennedy said in a statement.

The scandal-hit firm has said it has been co-operating with regulators in the United States and China, who have begun an investigation into the company.

Previously, Chinese companies did not have to meet these requirements in order to operate in the U.S. exchanges. "We don't think that the U.S. government's measures would have an irreparable impact on our business", said Li.

The airline sector and support companies like Melrose Industries and Rolls Royce are slowly beginning to dig themselves out of the corona-induced slump and although they have a long way to go before returning to price levels before March, each day brings some positive news.

But since discussions on increased disclosure requirements began past year, many other Chinese companies have either listed in Hong Kong already or plan to do so, said James Hull, a Beijing-based analyst and portfolio manager with Hullx.

The bill passed in the Senate, and will have to be approved in the House of Representatives before it is signed into law by the US President. "So I look forward to seeing that", Pelosi said.

The Senate also passed a separate bill to sanction Chinese officials over human rights abuses against Muslim minorities, which is now being discussed by the House with guidance from lawmakers and members of the relevant committees. It has been amplified especially by Republicans as President Trump has sought to blame China as the main culprit in the coronavirus pandemic. The long-simmering feud came to the forefront a year ago as Washington and Beijing clashed over broader trade and economic issues, and some in the White House have been urging Trump to take a harder line on the audit inspections.

"The Chinese Communist Party cheats, and the Holding Foreign Companies Accountable Act would stop them from cheating on US stock exchanges", Sen.

Chinese Renaissance estimated that 36 Chinese firms now listed on USA exchanges would qualify for a secondary listing in Hong Kong.

As per the Bill, the U.S. can also impose sanctions on individuals responsible for human rights violations in Hong Kong.

In a statement, American Securities Association (ASA) CEO Chris Lacovella said, "Chinese companies traded in the U.S. have routinely avoided the SEC's rigorous company-specific disclosure and audit regulations, leaving American investors in the dark and at risk, and now we know why".

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