• 2006-12-07

    EZ come EZ go?Think again!

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    http://www.blogbus.com/danecao-logs/3988692.html

    I never know delisting from a US stock exchange could be such a headache.

    Chinese companies are flocking to get listed overseas,thinking they'd find a capital bonanza once listed in a foreign land,ideally The US.

    Promising tech start-ups here are rendered even more so when they announced they have sucessfully gone public on,say,the Nasdaq.They touted the fact as if it has the power to turn sand to gold.And guess what?It does.Investors and consumers in China are perfectly publicity-prone and easily won over by such "glorious" feat as getting listed in the United States Of America.Even if you can't scoop any real money from US people,the Fact that you are able to scrape money from the US could easily assurethat you will have a field day here in China capital market.

     If only they knew how easily this all could turn into a nightmare.

    According to relevent rules of the draconian Sarbanes-Oxley act,companies listed on US stock exchanges would have to register and continue to report to SEC even after they delisted from said US stock exchange,if they boasted more than 300 US-based shareholders.Translation:You would never possibly get rid of the prying eyes of SEC once you get listed on US soil.It's like a hotel where you could check in but never could really check out.

    Ultimate Exit Strategy?Force your US shareholders to sell the shares they hold of your company and try to reach down the threshold.

     Word is getting out that Help is on the way.Congress is toying with the idea of revising the threshold above which Sarbox will remain Draconian.A fixed number criterion seems outmoded and arbitrary,if anything.A percentage-based threshold solution is said to be in the works.But STILL TOO HASSLE TO GET LISTED IN THE STATES.

     Is US getting increasingly business-unfriendly or is the rest of the world are getting woefully lax in capital market regulation?

     

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