248 Chinese Companies with Off-Limit Audits & Market Cap Over $2.1 Trillion Listed on U.S. Exchanges. Now Congress Demands Action from the SEC: For 19 years, China stonewalled U.S. regulators access, Companies based in China... https://www.congress.gov/bill/116th-congress/senate-bill/945/text

[u/DomPachino]

https://www.philstockworld.com/2021/08/27/248-chinese-companies-with-offlimit-audits-and-a-market-cap-of-over-21-trillion-are-listed-on-us-exchanges-now-congress-demands-action-from-the-sec/

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[u/StatementOrIsIt]

I remember watching a documentary called The China Hustle from the documentary cycle Dirty Money, it centered around a few dedicated short sellers who were doing investigations on Chinese companies listed in the US, and doing just that is illegal in China. This begs the question - how can anyone really trust Chinese companies, if everything is secretive and illegal to even try to find the answers yourself? The only information somebody outside of China can use are the officially reported financial statements, but there is no independent audit which would confirm them. Best part is that China has agencies that are very stringent on corporate reporting requirements, but there is no communication between the SEC, for example, and The State Taxation Administration, so the companies statements can be fraudulent, but there would be no official mechanism to find the truth.

A generally quite interesting documentary, if you are interested in fraud and finance.

Also, Gary Gensler of SEC recently put out a video (12 days ago) on this topic:

https://twitter.com/GaryGensler/status/1427364280383442945?s=20

[u/CrimsonBolt33 → u/StatementOrIsIt]

And that doesn't even lean into the issue of the government being able to shut down or prop up anyone at any time for any reason which can easily skew stock prices...would be so easy as a government official to put a short in US stocks and then mess with the company and cause the price to fall.

​

It's a scam and a method to have money outside of China, which is notorious for not allowing people to take money out of the country.

[u/ETsUncle]

“State-owned companies in China are controlled by the Chinese Communist Party (CCP). (That Americans are unwittingly raising capital to fund state-owned or state-controlled companies in China is nothing short of breathtaking.)”

This is a bit editorialized, but it hammers home the problem inherent in keeping out auditors.

[u/krautworst]

Better later than never. I think China exploited US Investor for a long time, by forging financials. Recently I saw a study showing the net income margin distribution of Chinese companies vs US based ... while the US curve looks gaussian, the Chinese somehow have almost none with negative margins :D

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