Trump admin proposes delisting of Chinese firms failing to meet audit norms

Such a move comes after the US Senate passed a bipartisan legislation in May. As per the legislation, the Chinese companies that do not comply with these regulations in three years would be delisted.

The Trump administration is considering a proposal to crackdown on Chinese companies that are listed in the US and do not follow American audit requirements, according to a media report.

As per the proposal, as reported by The Wall Street Journal, the Chinese companies listed on American stock exchanges like New York Stock Exchange and NASDAQ be subject to audit by US regulators or else they would be delisted.

To comply, Chinese auditors would have to share their work papers with the Public Company Accounting Oversight Board, a specialised audit regulator overseen by the US government, the financial daily said.

Chinese firms that are not yet public, but which plan to do an initial public offering in the US, would have to comply before they can go public on NYSE or Nasdaq, and would not get until 2022 to follow the rules, the report said, quoting senior officials from the Department of Treasury and Securities and Exchange Commission.

"These recommendations are consistent with bipartisan congressional legislation and are centered on the importance of a level playing field, US Securities and Exchange Commission Chairman Jay Clayton was quoted as saying in the report.

Such a move comes after the US Senate passed a bipartisan legislation in May. As per the legislation, the Chinese companies that do not comply with these regulations in three years would be delisted.

The latest move of Trump Administration is part of its effort to crackdown on Chinese companies, the report said.

President Donald Trump has given September 15 as the deadline to TikTok, the popular Chinese app, to sell it to an American owner or face its closer.

Last month, the US asked closure of Chinese consulate in Houston accusing it of being a spying hub.

In his remarks at a Whirlpool manufacturing plant in Ohio on Thursday, Trump said that his administration was bringing trade cases against China to crack down on its economic aggression.

In an op-ed in Roll Call, Congressmen Adam Kinzinger and John Joyce alleged that the Communist China Party (CCP) has increased its threats on the US through technology advances. As such, United States must push back by leading in innovation and bolstering telecommunications security.

"China's more recent technological power not only endangers America's national security, it also poses a serious threat to the human rights of Chinese citizens and freedom-loving people around the world. Communist governments do not tolerate any form of dissent, and Beijing routinely uses technology to surveil, silence and threaten its critics," they wrote.

Huawei, another company with ties to the Chinese government, regularly comes under fire for its blatant disregard of human rights," they said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel