China In-Focus — Three-tier data strategy to avoid US delistings; China Evergrande CEO, CFO step down
RIYADH: China plans to sort US-listed Chinese companies based on the sensitivity of the data they hold in an attempt to stop US regulators from delisting hundreds of firms, the Financial Times said on Saturday.
The three-tier system aims to bring Chinese companies into compliance with US rules that would require public companies to let regulators inspect their audit files, the FT said, citing four unnamed people with knowledge of the situation.
The three broad categories include companies with non-sensitive data, sensitive data and secretive data, the newspaper said.
Washington has long demanded complete access to the books of US-listed Chinese companies, but Beijing, citing national security concerns, bars foreign inspection of working papers from local accounting firms.
Evergrande CEO, CFO step down after probe
China Evergrande Group said on Friday that its CEO and finance head have resigned after a preliminary probe found their involvement in diverting loans secured by its publicly listed unit to the group.
The indebted company was investigating how deposits worth 13.4 billion yuan ($1.99 billion) belonging to the unit, Evergrande Property Services, were used as collateral for pledge guarantees and seized by banks.
The pledges threatened to wipe out most of the cash the unit was holding.
The company said the loans secured by the pledges, which involved three sets of deposits, “were transferred and diverted back to the group via third parties and were used for the general operations of the group.”
Global investors have turned their attention to the Chinese developer’s cash flow problems out of worry that a collapse may shake the financial system and slow development in the world’s second-largest economy.
The embattled developer said CEO Xia Haijun has resigned from the group due to his involvement in the arrangement of the pledges, along with Chief Financial Officer Pan Darong.
Siu Shawn, who is currently an executive director of the company and chairman of the group’s EV unit, has been appointed as the new CEO. Vice President Qian Cheng has been named chief financial officer, the company said.
China will require online ride-hailing firms
China’s transport ministry said on Friday that it will require online ride-hailing firms to submit real-time data, the latest measure regulatory authorities have taken to strengthen control over user data handled by private companies in the tech sector.
The measure was announced on the transport ministry’s website a day after ride-hailing giant Didi Global was fined $1.2 billion over violations, including an excessive collection of passenger data.
(With input from Reuters)