The China Securities Regulatory Commission refuted claims that it cheated on U.S. capital markets and said it had proactively sought terms that were «mutually acceptable».
Since 2019, «China has proactively sought to build a mutually acceptable mechanism for inspection», according to an «SCMP» report citing a response from the CSRC, declining to identify any of the companies. «We can say that the collaboration has been effective.»
The last outreach – previously not made public – was made was on April 3, one day after the Luckin Coffee scandal revealed the fabrication of 2.2 billion yuan ($309 million) in inflated sales. Audit papers of 14-listed Chinese companies had been submitted to the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), CSRC said.
The response comes after the U.S. passed the «Foreign Companies Accountable Act» this week, which would push for stricter accounting standards for companies listed in the country. According to Louisiana senator John Kennedy after the act was unanimously passed in the upper house last month, the new legislation would «stop [the Chinese Communist Party from cheating on U.S. stock exchanges».
«National Security»
According to former China central bank governor Zhou Xiaochuan, the scandal underlines a gap between China and global accounting standards, stressing the need for the government and the country’s entrepreneurs to make their governance practices «understandable and acceptable» to the rest of the world.
«Some people have tied this problem to national security and think it’s unsolvable, but I disagree,» he said during a recent online video-based conference, adding that U.S.-listed Chinese companies don’t need to rely on fundraising in international markets.
