Foreigners forced to play by US rules
The legislative push against corporate malpractice in the US looks set to place a burden on foreign companies listed there and might discourage others from joining them.
|Bart van der
Burdensome to US corporations but in line with clamour that they clean up their act, the Sarbanes-Oxley legislation sends a different message to foreign companies. In short, the new law seems to imply that the US neither wants nor needs them.
The hastily drafted legislation was politically inspired by domestic corporate governance scandals but it - and the draconian penalties it imposes for non-compliance - will apply to foreign firms even though in its drafting no account was taken of their circumstances. Foreign companies are still smarting from their sudden exclusion from the S&P500 index.