SEC Report: U.S. Investors’ Exposure to Domestic Chinese Issuers

The accounting fraud at Lukin Coffee is just the latest reason to raise concerns about investment risks in Chinese companies. The SEC has issued a new report that includes the exposure of the biggest pension funds in the UA. Excerpts here (footnotes omitted), full report below.

More than 150 China-based companies with a combined market value of $1.2 trillion were listed on U.S. stock exchanges at the end of 2019. As more China-based companies have listed in the U.S., there has been growing concern about the lack of transparency into accounting and governance standards of Chinese firms, which policymakers and certain market participants have warned put U.S. investors at increased risk because of the inability of the Public Company Accounting Oversight Board (PCAOB) to inspect audit work and practices of PCAOB-registered auditing firms in China (including Hong Kong-based audit firms, to the extent their audit clients have operations in mainland China) with respect to their audit work of U.S.-listed companies with operations in China.


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