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.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
