The ongoing confidence crisis in the accounting practices of US-listed China stocks continues, with word that China’s securities regulator may be trying to squash the most commonly used route for Chinese firms to list overseas. Media are quoting industry sources saying the Chinese Securities Regulatory Commission has submitted a plan to the nation’s Cabinet asking it to shut down the route, known in the industry as use of Variable Interest Entities or VIEs, or at the very least require all companies that use this gray-area road to overseas listings to vet their financials through the Chinese regulator. (English article; Chinese article) There are clearly some alarming implications here, especially if the Cabinet takes the more extreme route and shuts down the VIE listing route that has been in effect for more than a decade now, staring with listings of Web names like Sina (Nasdaq: SINA) and NetEase (Nasdaq: NTES) as early as the late 1990s, and which has expanded since then to include other areas like media and microchips. While one can never exclude a more drastic action, the CSRC’s move looks more opportunistic, aimed at giving it more control over Chinese companies that go overseas to list by drawing on the ongoing confidence crisis over the accounting practices of some overseas-listed China companies. My own sources confirm that something is happening, but share a similar view that any concrete action is probably a year or more away and is highly unlikely to include an outright shut-down of the current VIE process, which has had tacit approval of the central government for more than a decade now. What finally emerges may be a route to overseas listing that will include an added stop through the securities regulator, which could somewhat slow the process and would probably have the added effect of weeding out many more questionable companies like the ones that created the current crisis. In the meantime, we could see a mini-rush of companies making IPOs over the next year if the market improves, as they race to get there before any new policies take effect.
Bottom line: The securities regulators’ attempt to insert itself into the overseas listing process for Chinese firms could lenthen the process, but will also weed out many more questionable companies.
中国赴美上市企业会计丑闻引发的信任危机仍在继续，有传闻称中国证券行业监管机构可能正建议取缔中国企业海外上市过程中最常用的VIE结构。媒体援引行业消息人士报导，中国证监会已经向国务院递交申请，建议国务院取缔业可变利益实体(VIE)这种有争议的公司结构，或是至少要求所有使用这种方式赴海外上市的公司将财务报告提交中国证监会进行审核。显然，这将产生重大影响，特别是如果国务院采取更严格做法，取缔VIE上市途径。VIE做法已经存在十多年，最早开始于上世纪90年代末期新浪(SINA.O)和网易(NTES.O)等互联网公司的海外上市，随後扩大到媒体和芯片等其他行业。尽管无法排除采取更严厉行动的可能性，证监会的行动看似更具机会主义性质，目的在于利用部分海外上市的中国公司因会计问题面临持续信心危机的机会，对海外上市企业加强管控。我的消息人士证实将有事情发生，但是也持有类似观点，即任何具体行动可能要等一年或更长时间才会开始，基本上没有可能全面取缔现有VIE程序，中央政府在过去十多年来始终对此做法采取默许态度。最终结果可能是，计划海外上市的公司必须增加在中国证监会接受审查的程序，这可能会在某种程度上延缓整个上市进程，也可能有效排除更多有问题的公司，就像引发当前危机的这些企业。同时，如果市场大势改善，未来一年很可能出现一波上市小高潮，争相赶在新政出台前完成上市。
一句话：证券监管机构试图介入中国公司赴海外上市进程，可能令上市进程延长，但也将清除更多有问题的公司。
Related postings 相关文章:
◙ Accounting Scandal Claims AutoChina As Second Big Victim
◙ Deloitte, SEC Clash in New Confidence Crisis Chapter
◙ Sharks Come Out in China Stock Crisis 信任危机冲击在美上市中资股
