In this file photo taken on November 9, 2018 US Secretary of State Mike Pompeo speaks during a press conference with Chinese politburo member Yang Jiechi and Defense Minister Wei Fenghe during the US-China Diplomatic and Security Dialogue in the Benjamin Franklin Room of the State Department in Washington, DC. (AFP photo)
US Secretary of State Mike Pompeo has warned American investors against what he called "fraudulent" accounting practices of China-based companies, saying the decision the Nasdaq made recently to tighten listing rules for such players ought to be a "model for other exchanges in the United States, and around the world."
Pompeos remarks on Thursday are indicative of the latest flashpoint in US-China relations as well as President Donald Trump administrations desire to make it harder for some Chinese firms to trade on exchanges outside China.
This comes at a time of escalating tensions between the worlds two largest economies over trade, the coronavirus pandemic as well as a dispute over Hong Kong.
"The Trump administration is committed to ensuring that all American businesses and investors can operate on a level playing field with the rest of the world," Pompeo said in a statement.
"American investors should not be subjected to hidden and undue risks associated with companies that do not abide by the same rules as US firms."
The top US diplomat said Trump had ordered the Presidential Working Group on Financial Markets to carry out a study into the differing practices of Chinese companies listed on the US financial markets.
Last month, Nasdaq tightened listing rules in order to curb initial public offerings made by Chinese companies closely held by insiders and with transparent accounting.
That came after Chinese coffeehouse chain Luckin Coffee, which had a US IPO in early 2019, had announced that an internal probe showed its chief operating officer and other employees fabricated sales deals.
Pompeo said, "I applaud Nasdaq for requiring auditing firms to ensure all listed companies comply with international reporting and inspection standards."
"Nasdaqs announcement is particularly important given a pattern of fraudulent accounting practices in China-based companies," he added.
Last Friday, Trump said his administration would start the process of eliminating special US treatment for Hong Kong to punish China, arguing Beijings move to impose new national security legislation could mean the territory no longer warranted US economic privileges.
Many US-listed Chinese firms will likely list on the Hong Kong exchange this year partly because of the political pressure the US is exerting on them, the head of that exchange said Thursday.
In April, the head of the US Securities and Exchange Commission (SEC), Jay Clayton, warned investors against putting money into Chinese companies because of the current problems with those companies disclosures.
SOURCE: PRESS TV
LINK: https://www.ansarpress.com/english/18186
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