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China, US-State Media Working Hard on Solutions to Audit Disputes

Taken on January 27, 2022, this figure has the flags of China and the United States printed on paper. REUTERS / Dado Ruvic / Illustration

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Shanghai, March 27 (Reuters)-Chinese regulators and their US counterparts are working hard to resolve audit disputes affecting US-listed Chinese companies for effective and sustainable cooperation. We want to achieve it as soon as possible, the state newspaper reported on Sunday.

Citing sources close to Chinese regulators, the official China Securities Journal reports that the China Securities Regulatory Commission (CSRC) has heard from several US-listed Chinese companies during an online meeting on Sunday. Did.

“Chinese and US regulators are fully aware of each other’s concerns, are moving towards each other, and are working hard to find solutions to their problems in order to achieve effective and sustainable cooperation as soon as possible. We are working on it, “said a source. ..

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“This is in the best interests of both countries’ capital markets and global investors.”

The CSRC said recent consultations with US regulatory agencies were efficient, frank and professional.

The comment is whether accounting regulators of U.S. listed companies are “premature” in recent media speculation about imminent transactions with China and whether the Chinese government will allow access required by the new U.S. listing law. Will come a few days after stating that is unknown.read more

Washington demands full access to US-listed Chinese companies’ books, but Beijing bans foreign inspections of working papers from local accounting firms-hundreds of billions of dollars in US investment A long-term audit debate that puts you at risk.

The Hang Seng Tech Index (.HSTECH), which tracks some of China’s leading tech companies such as Alibaba Group Holding Ltd (9988.HK) and Baidu Inc (9888.HK), rose 3.6% on Monday morning to 1.3. % Increased. Benchmark index Hang Seng.

Significant difference

However, some analysts and investors remain skeptical about finding a solution.

“There is a big difference between US and Chinese regulators. Many US-listed Chinese companies will eventually face delisting,” said Hao Hong, head of research at BOCOM International. It states.

U.S. regulators are demanding government interest in listed companies and disclosure of sensitive information and data, but the Chinese government “strengthens control over many of China’s largest and most important companies,” he said. Added.

To avoid the risk of delisting, New York-based asset management firm Krane Funds Advisors announced earlier this month that the $ 4.9 billion KraneShare CSI China Internet ETF will receive all Chinese Depositary Receipts (ADRs) in its portfolio. He said he was aiming to convert to Hong Kong shares in the future. Several months.

According to Reuters, Chinese regulators have disclosed audits to some US-listed companies such as Alibaba, Baidu and JD.com as Beijing stepped up its efforts to stay listed in New York. Requested to prepare for.

The Financial Times and Bloomberg News reported this month that China’s securities watchdog is considering a proposal to allow US regulators to inspect the working papers of some corporate auditors soon this year.

The China Securities Regulatory Commission warned market participants on Sunday not to blindly believe in speculation by some media with little knowledge of the details and direction of the negotiations.

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Report by Shanghai Newsroom Edited by Raissa Kasolowsky & Simon Cameron-Moore

Our Criteria: Thomson Reuters Trust Principles.

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