US Congress passes bill to delist deceitful Chinese companies from American stock markets
Washington, Dec 3: The US Congress has passed a bill that prohibits companies from being listed on American stock markets if they fail to provide the regulators access to their audit information for three years in a row, paving the way to delist deceitful Chinese companies from the US securities exchanges.
The bipartisan Holding Foreign Companies Accountable Act will help protect American investors and their retirement savings from foreign companies that have been operating on US stock exchanges while flouting oversight.
The bill was passed by the House of Representatives on Wednesday. It was passed by the Senate on May 20. The bill now heads to the White House for President Donald Trump to sign it into law.
The bill prohibits securities of a company from being listed on any of the US securities exchanges if the company has failed to comply with Public Company Accounting Oversight Board (PCAOB) audits for three years in a row.
It requires public companies to disclose whether they are owned or controlled by a foreign government, including China's communist government; and ensures foreign companies traded in America are subject to the same independent audit requirements that apply to American companies.
The Trump administration has passed a series of measures aimed at severing the economic ties between the US and China. US-China ties have deteriorated sharply over issues ranging from trade, the coronavirus pandemic and telecoms-gear maker Huawei to China's territorial claims in the South China Sea and its clampdown on Hong Kong.
There is no reason to let Communist China game the system and put American investments in jeopardy. Our bill protects our constituents' hard-earned money and shines a light on China's nefarious actions. I am glad the House supported it and look forward to President (Donald) Trump signing it, Senator Kevin Cramer said.
This may be the most significant piece of investor protection legislation passed in several years, said Congressman Brad Sherman, Chair of the Investor Protection and Capital Markets subcommittee.
It is designed to assure Financial Statement integrity of 224 US-limited companies with over USD 1.8 trillion in market capitalisation. The purpose is not to de-list any company, but to persuade China to allow the audit oversight that US investors need, and the US investors get when investing in US companies or companies in over 50 foreign jurisdictions, he said.
Currently, the Public Company Accounting Oversight Board is unable to inspect the audit work and practices of PCAOB-registered audit firms in a handful of foreign jurisdictions, primarily China.
In most cases, audit firms in those foreign countries cite local laws related to data protection, privacy, confidentiality, or national security as the reason for being unable to provide the PCAOB with the information they need to complete their inspections.
According to PCAOB, accounting firms which are unable to provide information necessary for effective oversight currently serve as the principal auditor for 224 US-listed companies which have a combined total of USD 1.8 trillion in market capitalisation.
The Holding Foreign Companies Accountable Act will protect investors and enforce a level playing field between US and foreign companies by requiring companies which go three years without the appropriate PCAOB audit inspection to be delisted from US exchanges.
The legislation also requires foreign issuers to provide disclosures as to whether the company is owned or controlled by a foreign government.
The People's Republic of China has continuously sought to undermine and skirt rules to the detriment of American businesses and national security. In the case of their refusal to participate in PCAOB inspections, this situation is unfair and dangerous for investors, said Congressman Anthony Gonzalez.
The Holding Foreign Companies Accountable Act is designed to prevent companies based in China and certain other jurisdictions from taking advantage of our deep and liquid capital markets while avoiding the scrutiny that comes with inspection of their financial statement audits, he said.
Senator John Kennedy said China is currently using US stock exchanges to exploit American workers and families - people who put their retirement and college savings in public companies.
US policy is letting China flout rules that American companies play by, and it's dangerous, he said.
Millions of American families rely on modest investments to retire, send their kids to college, and weather financial emergencies. But many have been cheated out of their money after investing in seemingly-legitimate Chinese companies that are not held to the same standards as other publicly listed companies, Senator Chris Van Hollen said.
This bill rights that wrong, ensuring that all companies on the US exchanges abide by the same rules. I've been proud to work with Senator Kennedy on this bipartisan legislation, and I'm glad to see it pass the House with such strong support. I urge the President to sign this bill into law immediately, he said.
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Tata-Airbus helicopter facility shining example of partnership in high-end manufacturing: Rajnath
Kolar (Karnataka) (PTI): Defence Minister Rajnath Singh on Tuesday said the investment into H-125 helicopter programme is "anticipated" to cross Rs 1000 crore, and create a number of jobs, and called it a "shining example" of mutually beneficial partnership with friendly countries in high-end manufacturing sector.
He was speaking at the inaugural ceremony of the final assembly line of H-125 helicopters here.
Prime Minister Narendra Modi and French President Emmanuel Macron virtually inaugurated the Airbus H125 light utility helicopter Final Assembly Line at Tata‑Airbus' facility at Vemagal Industrial Area in this district from Mumbai.
Singh, accompanied by his French counterpart Catherine Vautrin, congratulated Tata Advanced System and Airbus Helicopters on the inauguration of the project and recalled their earlier association as well.
"This project is a shining example of mutually beneficial partnership with friendly countries in high-end manufacturing sector," Singh said.
"The H-125 program investment is anticipated to exceed Rs 1000 crore and is likely to create direct and indirect employment opportunities for our skilled and hard working younger generation," he said.
Renowned for its exceptional reliability, versatility, and outstanding performance under diverse operating conditions, the H-125 has proven to be one of the most effective and trusted single-engine helicopters globally, he said.
He recalled that Tata Advanced Systems and Airbus had earlier joined hands for a project in Gujarat's Vadodara for the C-295 aircraft, which he described as a symbol of how Tata in particular and India in general can collaborate with international OEMs to contribute to the vision of a stronger India.
The Defence minister said "Make in India" and self-reliance have been the cornerstone of India's economic policy since 2014.
Singh recalled that this policy initiative was launched by PM Modi, under which India is committed to achieving self-reliance in critical technology and the manufacturing of high-end products and equipment through mutually beneficial partnerships.
"For more than a decade, India has been charting industrial development through large-scale infrastructure building, capital infusion in important sectors through a number of incentive schemes on the one hand, and providing a level playing field for facilitating investment on the other," he said.
He added that it has also been the government's focus to support small and medium industries and strengthen the startup ecosystem in particular. Overall, the focus has been on holistic industrial development, which not only caters to domestic demand but also addresses the needs of other countries.
Highlighting reforms in the defence sector, Singh said these measures have augmented the contribution of the private sector in the defence industrial ecosystem.
According to him, historically, Indian defence production was largely public sector-oriented due to requirements of high capital investment and long gestation periods, resulting in the private sector's contribution being far less than desired.
However, with reforms such as the corporatisation of ordnance factories, establishment of defence industrial corridors, and other initiatives to raise the private sector's share in total defence production, it now stands at almost a quarter of the country's total defence production.
Defence exports have also increased manifold, placing India among the top exporters in the world, he said.
Singh said the growth trajectory has given a massive boost to MSMEs and ancillary sectors, which have grown to more than 16,000 in number, with many foreign companies sourcing components from Indian MSMEs.
He invited companies to deepen the partnership through meaningful technology transfer and offer platforms to meet the security needs of other countries as well.
Union Civil Aviation Minister K Rammohan Naidu, who also attended the event said the H125 final assembly line set up by Tata and Airbus marks a defining moment for India's aerospace sector, calling it "a proud symbol of rising confidence in India's high-precision aerospace capabilities."
He described defence and civil aviation as "two strategic pillars of the Indo-French partnership" and said the new facility would reinforce "a single integrated aerospace ecosystem" by assembling both civil and defence variants.
Noting that India has risen from the 10th to the third largest civil aviation market in just 11 years, Naidu asserted that the country now has "the market, the export potential, the policy ecosystem, the skilled workforce and the strategic global partnerships to emerge as a rotary-wing manufacturing hub".
"The future of rotary aviation in South Asia will be designed, manufactured, certified, maintained and exported from India," he said, adding that the country is "not just flying high, but flying past all horizons" under the Make in India and Viksit Bharat 2047 visions.
Tata Advanced Systems CEO and MD Sukaran Singh said in this facility here, "we will start building helicopters without any government or defense orders."
"However, we will be ready to supply the defense forces as and when they want. The first helicopter will fly out this facility by mid 2027."
