US Treasury Secretary says China to hand audit work to SEC
US government wants increased oversight after alleged misconduct at US-listed firms based in China led to billions in losses
Chinese regulators will hand over some audit documents of US-listed Chinese companies to US securities regulators, US Treasury Secretary Jack Lew said on Thursday, a move that may thaw a dispute over multiple accounting scandals.
Washington wants greater oversight after alleged misconduct at US-listed firms based in China led to billions in losses, but investigations into possible fraud have been stymied as auditors have refused to turn over papers for fear of violating Chinese secrecy laws.
A US Securities and Exchange Commission (SEC) official also testified in court on Thursday that documents relating to one company may arrive soon, according to a person in the court room.
But underscoring doubts over China’s willingness to provide the documents, the official added that the China Securities Regulatory Commission (CSRC) has had a history of not following through on requests for assistance.
The SEC has been struggling for years to obtain audit work in China and many of the companies in question have seen their auditors resign. In some cases, the SEC and US exchanges have delisted or deregistered the companies with accounting irregularities.
Lew’s remarks came as high-level talks between the US and China came to a close on Thursday.