One Good Reason to Delist Chinese Companies | Hacker News Reader

One Good Reason to Delist Chinese Companies

bloomberg.com

33 pointslawrenceyan9 comments

Anyone able to chime in on this with professional experience?

I always assumed that a foreign company looking to be listed public in the USA had to play by our rules at least within USA soil. Including accounting and oversight. After a little bit of reading (I'm not really into investing/SEC rules), I'm finding out that no foreign country really has to. Almost honor system like standards. And it seems to stem from '07 when the EU pushed for that. Am I really off base? Confusing facts? I've only been researching for 15 minutes and need to do a lot of backlog reading to get a handle on it since it's not my field of experience.

They are generally required to follow US GAAP or International IFRS rules as a condition of being listed on a US exchange and undergo regular audits, but neither of these is an actual legal requirement, and the exchanges are not very good at enforcing their rules now that they are for-profit entities.

The SEC rules really just say that you can't defraud your investors.

So it would be up to the Fed to force and enforce regulations that the NYSE has to abide by. I doubt Interpol or the UN gives two shits. Especially the UN since they're having money troubles right now. But at least, freezing trading on a foreign company in the USA is at least something. Guessing there's going to be a bunch of loopholes if you have enough money and resources to just buy that stock anyways. Yea, a bit of a shitty problem I take it.

I don't understand your comment at all.

All the NYSE has to do is enforce it's own existing rules and nearly every Chinese company on its index would be kicked off.

The Feds, Interpol, UN etc. have nothing to do with stock listings.

> All the NYSE has to do is enforce it's own existing rules and nearly every Chinese company on its index would be kicked off.

Perhaps all it takes is a complaint to NYSER [1] and FINRA, CCd to the SEC to find out why the NYSE isn't enforcing it's own rules on their exchange in regards to these listed Chinese companies. I submitted an inquiry to request the mailing address for complaint submission to NYSER, so a certified mail paper trail can be started. Best source of data for a list of Chinese symbols that would be non-compliant?

[1] https://www.nyse.com/regulation | https://www.nyse.com/regulation/complaints-and-inquiries

No direct experience with this, but I just watched “The China Hustle” on a plane flight recently:

https://www.thechinahustlefilm.com/

During the 2010’s several hundred Chinese companies were listed on US exchanges, and it was discovered later by intrepid investors that many had materially misrepresented their operations, financials, etc and were little more than run-down plants from China’s full-communist past. The film goes into more detail and visits several to show what they really are.

https://www.govtrack.us/congress/bills/116/s1731

Found the bill regarding this. Only 3% chance of passing tho? Anyone know whether the executive branch/SEC could do something on their own?

> arguing that disclosing the records would violate laws that prohibit the transfer of data potentially containing state secrets to foreign entities.

If there is fraud its likely state sponsored fraud, I have a hard time imagining another reason to explain this type of position; open to hearing other ideas. Honestly it's quite brilliant, instead of selling bonds just list another company in the west and skim money off the capital raised there.

It only makes sense that Chinese companies should have to play by our rules. In large part US companies have been happy to tap into that Chinese behemoth <insert Google-China relationship here>, but I can't help but to wonder if the CCP will double down on giving favorability to their native companies. We saw a little bit of this with the (albeit highly unpopular) tariff back-and-forths. However China cannot operate in a vacuum. Their economy is very highly dependent on the US.

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