Chinese companies applying to go public in the United States are facing increasingly detailed questions from the Securities and Exchange Commission (SEC) about their offshore corporate structures, according to people familiar with the matter.
Many of the SEC's queries have focused on the nature and direction of cash flows through so-called variable interest entities (VIEs), which allow Chinese companies to circumvent Beijing's restrictions on foreign ownership, the people said, asking not to be identified because the discussions are private.
SEC officials have asked the firms to quantify transfers and dividends between the parent company and other entities, as well as their respective balances and any tax implications, the people said. The regulator has also asked for additional disclosures on political and regulatory risks in China, one of the people said, adding that new applicants may face as many as 20 more questions than was typical before this month.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
