The US Senate passed a bill on Wednesday that could force some Chinese companies to de-list from US exchanges if they do not comply with American accounting regulations.
The legislation, which needs also to be passed by the House of Representatives, calls for a company to be barred from listing securities on US exchanges if it has not complied with the US accounting board’s audits for three consecutive years. It would also require listed companies to disclose whether they are owned or controlled by a foreign government.
The Public Company Accounting Oversight Board, which audits the accounts of public companies, is prohibited from inspecting the accounts of companies registered in China or Hong Kong, according to one of the bill’s sponsors, John Kennedy, a Republican senator from Louisiana.