(Yicai Global) April 24 -- Listed companies from many emerging markets including China, present issues such as deficient information disclosure and inaccessible audit paper, so investment risks are great, Jay Clayton, chairman of the US Securities and Exchange Commission, told Maria Bartiromo on her FOX Business Network show ‘Mornings with Maria’ yesterday.

"We have struggled for a long time with the Public Company Oversight Board (PCOB) getting access to audit work papers. The Board still does not have access. It's a source of frustration for us because we don't have the same oversight with respect to operations in China from a financial reporting point of view that you do in most of the rest of the world," Clayton said.

"This (audit) inspection issue with respect to China is something we think investors should focus on," Clayton added.

"We don't want to deny [investors] access," Clayton added, "But what we do want them to understand is that the risks are different."

Two US-listed Chinese companies have been recently outed as having engaged in fraud. Luckin Coffee falsified transactions totaling CNY2.2 billion (USD311.1 million) from the second to the fourth quarter of last year, the company said in a statement on the evening of April 2.

Some employees of TAL Education forged contracts with outside suppliers and faked sales data for its online teaching app for primary school students ‘Light Class,’ the company said in an April 7 statement. The total sales of the app made 3 percent to 4 percent of total revenue from March 2019 to February 2020, according to the company’s earlier disclosure.

Research company Wolfpack Research released a report of iQiyi’s financial fraud on April 7. Netflix-like iQiyi engaged in fraudulent activities before the initial public offerings in 2018 that continue to this day, the short seller charged. The company will falsely pad its revenue forecast for last year by about CNY8 to CNY13 billion (USD1.8 billion), making up 27 percent to 44 percent of its claimed revenue. It also faked user count growth of 42 percent to 60 percent, Wolfpack said. iQiyi has denied this, however.

Some US lawmakers and former officials are making frantic efforts to try to persuade the Trump administration to suspend plans to invest federal employee pensions in Chinese companies. Washington suspects these companies violate human rights and imperil US security, Reuters said on April 21.

Editor: Ben Armour