China’s biggest restaurant company has hired international law firm Sidley Austin to regarding congressional efforts to force Chinese companies to comply with international auditing standards or risk getting booted off US stock exchanges.
Shanghai-based Yum China Holdings hired the firm effective June 1, according to a lobbying filing disclosed today. Sidley is expressly tasked with lobbying on the Holding Foreign Companies Accountable Act, which aims to tighten oversight of Chinese-owned corporations.
The US Senate passed the bill on May 20. A similar bill from Rep. Brad Sherman, D-Calif., awaits action in the House of Representatives.
The legislation “prohibits certain companies from listing and trading their securities on any US securities exchanges or through any other method regulated by the US Securities and Exchange Commission (SEC) if the Public Company Accounting Oversight Board (PCAOB) is prevented from reviewing the companies’ audits,” Sidley Austin wrote in a May 21 note about the legislation. “Text of both bills, statements by Sens. John Kennedy, R-La., and Chris Van Hollen, D-Md., cosponsors of the Senate bill, and statements by Rep. Sherman, demonstrate that the legislative intent was to address Chinese companies listed on U.S. securities exchanges.”
According to Nikkei Asia, “even Yum China, China’s largest restaurant chain operator and previously a unit of US-based Yum Brands, may not be spared. While the operator of the KFC, Pizza Hut and Taco Bell brands in China is registered in the U.S., its audit documentation is in the mainland.”
Lobbyists on the account include ex-Rep. Peter Roskam, R-Ill., a former subcommittee chairman on the powerful House Ways and Means Committee. The other lobbyists are former House Financial Services Committee senior counsel Michael Borden; Patricia DeLoatche, a former aide to former Sen. Orrin Hatch, R-Utah; and former House Appropriations Committee staffer Tracey LaTurner.
Yum China Holdings operates more than 9,200 restaurants in 1,400 cities and towns across China, according to its website, and has exclusive right to operate and sub-license the KFC, Pizza Hut and Taco Bell brands in China. The Fortune 500 company is listed on the New York Stock Exchange as YUMC.