BrokerDealer.com blog post courtesy of extracts below from weekend edition of WSJ.
A U.S. government commission warned that investors face “major risks” if they buy shares in Chinese companies like e-commerce firm Alibaba Group Holding Ltd.
The report said the corporate structure of Chinese firms like Alibaba is a ‘highly risky scheme of legal arrangements.’ Reuters
A report released this week by a commission that advises Congress on U.S.-China economic issues took aim at the legal structure underpinning Alibaba as well as a host of other Chinese Internet firms, calling it “a complex and highly risky scheme of legal arrangements.” It warned that the structure could lead to losses by shareholders in the U.S.
“U.S. shareholders face major risks from the complexity and purpose” of the structure, said the report, released on Wednesday by the U.S.-China Economic and Security Review Commission. The group, an independent agency directed by Congress, has in the past issued critical reports about China.
While the commission doesn’t directly make policy, its research can inform the work of policy makers and regulators, from members of Congress to agencies focused on securities listings, acquisitions and the U.S. economy.
For the full article from WSJ, please click here.