Jacob Frenkel Comments on US Capital Markets for China Businesses

In the September 2016 issue of China Business Law Journal, Attorney Jacob Frenkel discusses the market for U.S. listings of China companies in the article “Eagle Eye”.

In recent years, a rash of repeated accounting fraud scandals has reduced investor confidence and appetite for Chinese listings. As a direct result, valuations have plummeted and the flood of Chinese listings in the U.S. market has ended. Now more Chinese companies are considering to de-list from U.S. stock exchanges in order to go private and then re-list and trade in China.

Mr. Frenkel commented in the article about the SEC’s attitude towards U.S.-listed Chinese companies as “meaningful skepticism,” an attitude that is improving for two reasons: “One is there is a better understanding of the market. The other is that many of what the SEC viewed as the bad or fraudulent companies are pretty much out of business and off the markets. And the SEC is seeing Chinese companies viewing U.S. regulation and expectations more seriously. All companies that are public in North American markets are subject to much greater scrutiny than ever before.”

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