Posted on Nov 19, 2020 at 5:27 PM
This may be the last fight for Jay Clayton, the boss of the US financial markets policeman, who will step down at the end of the year. The Securities and Exchange Commission (SEC) is accelerating its plan to restrict the IPO conditions for Chinese companies. This, if successful, could lead to the withdrawal from Wall Street of several of them.
Chinese companies could indeed be excluded from the Stock Exchange if they refuse to have their figures audited by American experts. Today is the law but the American places have been accommodating, in recent years, to attract Alibaba, Baidu and other JD.com. Beijing refuses to submit to audits, supervised for nearly twenty years – and since the Enron scandal – by the Accounting Supervisory Board of Listed Companies (PCAOB). Chinese officials fear that auditors will leak industrial secrets, while the state is, in most cases, a shareholder in these companies. They themselves passed a law this year that bans their companies from submitting to audits without permission from the Chinese market regulator.