Dec 14 2020
WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, published this op-ed in the Baton Rouge Business Report on December 11, 2020.
Below are key excerpts from the piece, which examines the threat posed by foreign companies that are listed on U.S. stock markets but refuse to submit to the same auditing rules as other firms:
“Luckin Coffee, known as ‘China’s answer to Starbucks,’ has a casual relationship with the truth. In April, the company was forced to disclose that its chief operating officer, Jian Liu, inflated its 2019 sales by $310 million. The revelation caused Luckin Coffee’s shares to fall by 80%, and its value to drop from $12.7 billion to less than $800 million.
. . .
“Luckin Coffee was finally delisted from the American NASDAQ stock exchange, but the damage was done. Americans who invested in the Chinese company had already suffered tremendous financial damage.
“The problem is that Luckin Coffee is just one of almost 200 Chinese companies listed in America not subject to inspection by the federal Public Company Accounting Oversight Board (PCAOB). These companies claim that Chinese secrecy laws prevent them from sharing ‘sensitive’ paperwork for auditing by the PCAOB.
. . .
“To combat this threat, Congress just unanimously passed a measure with two main provisions: First, the bill requires foreign companies to certify that they are not owned or controlled by a foreign government—like Communist China. The provision also requires companies to disclose any involvement by Chinese Communist Party (CCP) officials. Second, any foreign company that does not open its books for PCAOB auditing for three consecutive years will be banned from trading stocks on U.S. markets.
“That’s key to how this bill, the Holding Foreign Companies Accountable (HFCA) Act, will protect investors at home. Many Louisianians and their fellow Americans rely on their stock portfolios for their retirement and education savings. It’s past time we safeguarded them from fraud by kicking bad actors off our markets.
. . .
“The HFCA Act passed without a single ‘nay’ vote because it will strengthen the credibility of U.S. stock markets, ensuring everyone plays by the same rules. As we recover from the economic challenges of a pandemic, the HFCA Act gives Louisiana investors peace of mind.
. . .
“China’s deception has gone on for long enough. With bipartisan agreement already forged, the HFCA Act is now on the president’s desk, where he can sign it into law before more good people get hurt. Americans deserve accountability from foreign companies, and it’s finally within reach.”
The full op-ed is available here.