- PRESENT DANGER CHINA - Sep 22, 2020 -
CPDC Warns ‘Beijing’s Bankers’ on Wall Street to Disclose Fully Material Risks in Deals with ‘Communist Chinese Military Companies’
Urges Halt to Exposure of U.S. Investors to Financial, Human Rights, National Security Dangers
WASHINGTON, D.C.— The Committee on the Present Danger: China (CPDC) today wrote four of the most prominent investment banks on Wall Street [here, here, here, and here] opposing their fundraising for two Chinese state-owned enterprises recently identified by the Defense Department as one of 31 People’s Liberation Army companies doing business inside the United States. The recipients of letters signed by Brian T. Kennedy, the Committee’s Chairman, were: Goldman Sachs and Bank of America which are underwriting a $2.4 billion dollar-denominated bond offering and another $590 million euro-denominated bond offering for the Chinese National Chemical Corporation (ChemChina); and J.P. Morgan Chase and Morgan Stanley which are doing the same via a $1.0 billion dollar-denominated bond for the China 3 Gorges Corporation.
The CPDC letters warned these “Beijing Bankers’” leadership and boards of directors as follows, based on a risk analysis performed by an independent research firm, RWR Advisory Group:
The effect of your company’s efforts to help underwrite the operations of a corporation identified by the U.S. Department of Defense as a Communist Chinese military company is to elevate the risks for all Americans. General Secretary Xi Jinping has made no secret of his determination to have China supplant the United States as the world’s leading power, by force if necessary. In fact, in May 2019, the CCP announced a “People’s War” against the United States, the latest phase of the strategy the Party has been pursuing for over two decades called “unrestricted warfare”– a multifaceted and comprehensive plan explicitly aimed at destroying this country.[1]
In short, [your investment bank] is aiding and abetting PLA activities and capabilities that enable a growing and increasingly existential threat to our country.”
As it happens, three of these four banks are simultaneously working to help another deeply problematic company tied to the Chinese Communist Party, Ant Technology Group, secure as much as $30-40 billion in an initial public offering that is expected to be the largest in history when it launches next month in Hong Kong and Shanghai. The CPDC expressed its opposition to that IPO in letters last week to Goldman Sachs, J.P. Morgan and Morgan Stanley, as well as the Hong Kong stock exchange and President Trump and his senior subordinates.
Today’s letters to Beijing’s Bankers concluded by forcefully serving notice:
The Committee on the Present Danger: China believes that it is the patriotic – and fiduciary – duty of [your company] and other Wall Street investment banks to cease and desist from fundraising for known PLA-affiliated companies. We are actively encouraging the U.S. government to: sanction companies on the Pentagon’s PLA list; prohibit American fund managers and others from raising funds for them; and forbid this country’s investors from holding their debt and equity. You are on notice of this additional, prospective material risk and the fiduciary implications of any failure to apprise the investing public of this possibility.”
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