A new report from the Council of Institutional Investors (CII) underlines the risks posed to investors by a corporate structure called a variable interest entity (VIE). Sixty two percent of Chinese companies listed on U.S. stock exchanges use a VIE, including internet giants Sina, Baidu, Alibaba and JD.com. U.S. exchanges are experiencing a surge of Chinese VIE IPOs, with 20 filings this year, including 15 since September 1, compared to six in 2016 and seven in 2015. Continue Reading →
Tag Archives | China
This is the final program for the Asian Corporate Governance Association‘s 13th Annual Conference taking place in Seoul, Korea on November 5-6, 2013. You can still reserve your place.
Sign up for Corporate Sustainability and Responsibile Investment in North Asia. Payment can be made by credit card (MasterCard, Visa, American Express). Please note companies registering two or more Continue Reading →
The Asian Corporate Governance Association (ACGA), an independent non-profit association based in Hong Kong and one of the region’s foremost organizations working in the emerging field of corporate governance, is seeking applications for the new position of Research Director – China / Hong Kong. ACGA carries out its work through research, education and advocacy in 11 Asian markets and this position marks an expansion of the Association’s contribution to China. Continue Reading →
Abstracts from a few papers posted this month to the Social Science Research Newtork.
Hall, Thomas W. and Jörgensen, Fredrik A., Ownership and Performance in Europe (2012). Forthcoming, Review of Business. The authors consider the relationship between performance and ownership concentration in a large number of publicly traded and privately held companies located in smaller European economies (Austria, Belgium, Finland, Ireland, and Ukraine). Continue Reading →
More than 400 participants turned out for the 2012 Forum of Corporate Governance for Listed Companies, which opened at the Shanghai International Conference Center on March 1. Continue Reading →
Francine McKenna writes that Deloitte Shanghai refuses to turn over workpapers and documents relevant to the SEC in their investigation of Longtop.
“Chinese law prohibits Deloitte China from providing the requested documents directly to a foreign regulator,” said spokesperson Lauren Mistretta. “Deloitte China is caught in the middle of conflicting demands by two government regulators, and DTTL hopes that this matter will be resolved in a timely and sensible matter.” McKenna concludes:
The S.E.C. must consider how much longer they will allow companies to list in the U.S. if they honestly and clearly tell you they are out of the reach of U.S. courts when something goes wrong.
The PCAOB must consider how much longer they will allow foreign-based audit firms to produce audit opinions if the PCAOB can not inspect them and if home countries refuse to cooperate with U.S. regulators.
U.S. courts must consider how seriously to take claims by global audit firms that they were “duped” by foreign fraudsters when they Continue Reading →
Last year, the International Finance Corporation (IFC) produced a report, the goal of which was to help the Shanghai Stock Exchange (SSE) improve the quality of sustainability reporting by Chinese companies.
While SSE was “one of the first stock exchanges to issue a directive for companies to publish a sustainability report,” IFC noted, “Existing frameworks provide guidance that is either too vague or too broad.” One way in which stock exchanges can encourage corporate sustainability reporting, IFC found, is by establishing sustainability indexes, as has been done in South Africa and Brazil.
From August 2011 Harper’s Index:
- Portion of employers who say they conduct criminal-background checks on potential employees: ¾
- Chance that an American adult has a criminal record: 1 in 4
- Percentage of applicants offered undergraduate admission to Harvard this year: 6.2
- Percentage of applicants accepted for employment on McDonanld’s National Hiring day in April: 6.2
From the July/August edition of Resurgence comes a review of Chandran Nair’s Consumptionomics: Asia’s Role in Reshaping Capitalism and Saving the Planet. by Chandran Nair by Ziauddin Sardar.
Rampant consumerism is the great curse of our time. The driving force is “free market Fundamentalism.” Nair thinks China and India will be forces of change, largely for two reasons:
- The US model if unsustainable. Corn, which is heavily subsidized, and where farmers pay nothing for the carbon emissions they generate, is an example of a model which assumes Nature has limitless capacity. That model only works when a small proportion of the Continue Reading →
‘The reluctance of family-owned firms to open their equity to outside shareholders has to some extent constrained the development of the capital markets in the Middle East,’ says Alissa Koldertsova, a policy analyst at the Paris-based Organization for Economic Cooperation and Development (OECD).
Examples are provided from several locations in Asia. For example:
Gome Electrical Appliances, one of the largest privately owned electronics retailers in China, serves as a prime example of a private, family-owned company struggling to survive under weak governance practices. Huang Guangyu, the company’s billionaire founder and its biggest shareholder, is serving a 14-year sentence in a Chinese prison for illegal business practices. In late September, he tried to increase his family’s control over the company from prison by submitting a proposal to have his younger sister and his lawyer installed as directors. The proposal failed.
Read more: Asia’s Corporate Governance Challenge.
ISS Issues 2011 Policy Updates – TheCorporateCounsel.net Blog, 11/22/2010. Broc Romanek provides highlights of ISS policy changes.
Dan Harris provides readers with his recent speech on Emerging Market/China Outsourcing Issues, China Law Blog, 11/21/2010. Also interesting, The China Rich….Are Not Like Us?, 11/19/2010.
The proposal to expand the executive branch’s role in oversight over financial institutions may represent the beginning of an incremental encroachment on SEC authority. Similarly, the proposed Consumer Financial Protection Agency could absorb a portion of the SEC’s traditional investor protection role. In the end, the SEC’s survival depends on whether its leadership takes effective action to restore its credibility andregain the public trust in the years to come.
On October 21, 2010, the Securities and Exchange Commission announced enforcement actions against Office Depot, Inc. and two executive officers for violating Regulation FD by selectively conveying to analysts and institutional investors that Office Depot would not meet analysts’ earnings estimates. (SEC Enforcement Action Under Regulation FD For Implicit Communications To Selected Analysts, Corporate Securities Law blog, 11/17/2010)
Across a matched group of more than 2,000 North American CEOs, annual pay climbed a slight 1.63 percent for the year. When increasing the pay scope to also include option profits and vested stock, compensation declined slightly, by 0.28 percent. Indeed, while we anticipated a second straight year of pay declines as of this spring, it’s evident that pay more or less stayed the same for the matched group as a whole.
(CEO Pay is Treading Water, The Corporate Library, 11/16/2010)
World Bank members voted to place China’s voting power in the organization behind the United States and Japan. The China’s stake in the bank climbed from 2.8% to 4.4 %. Given that China has made many achievements in eradicating poverty, we have reasons to believe the country will contribute more to global efforts on poverty reduction. (A resounding vote, China Daily, 04-27-10)
The World Bank’s private sector arm has signed its first deal to finance Chinese investment in Africa. (China Shifts Its Africa Investment Strategy, Forbes, 4/28/10) Will working more with international bodies, such as the World Bank improve China’s corporate governance, human rights and environmental standards?