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US Republican senators seek probe into Chinese companies

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
US Republican Senator Dan Sullivan of Alaska departs from the Senate Chambers in the US Capitol. (File photo by Getty Images)

US Republican senators have called on SEC Chair Gary Gensler to probe Chinese companies that list shares on American stock exchanges after US investors suffered due to a crackdown on the firms by the Chinese government.

Seven Republican lawmakers led by Senator Dan Sullivan of Alaska also urged Gensler to investigate underwriters involved in the Chinese companies' American initial public offerings and index providers that include the companies in their products, The Politico reported on Thursday.  

The senators, who want the SEC to punish Chinese companies, include Senators  John Kennedy (R-La.), Tom Cotton (R-Ark.), Kevin Cramer (R-N.D.), Bill Hagerty (R-Tenn.), Marsha Blackburn (R-Tenn.) and Rick Scott (R-Fla.).

In a letter to the SEC chair, the senators cited the recent stock price plunge of Beijing-based ride-hailing company Didi Global shortly after its IPO on the New York Stock Exchange.

Earlier this month, Didi shares took plunged when regulators in China cut off downloads of its app, citing national cybersecurity risks.

The GOP senators claimed the executives of the Chinese company downplayed the risks of Chinese regulation before going public and that the episode "highlights the troubling trend of Chinese companies taking advantage of our capital markets while ignoring the transparency that is required under U.S. law to access U.S. markets."

"The SEC should launch investigations into Chinese companies, like Didi, and their underwriters to combat potential fraud and reporting oversights," they said.

The Republicans also asked Gensler to pursue "expeditious implementation and enforcement" of legislation that would force out China-based companies off  American stock exchanges if they refuse to allow federal regulators to review their books.


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