Less than a week after EHang’s filing of a 20F annual report statement for the 2021 financial year, the U.S. Securities and Exchange Commission (SEC) has notified the Chinese eVTOL aircraft developer that it has been flagged for accounting procedures scrutiny under the Holding Foreign Companies Accountable Act (HFCAA). The notice, served by the federal regulator on May 4, effectively puts EHang on notice that it needs to use an accountancy firm that meets U.S. requirements for transparency.
The company completed an initial public offering on Wall Street back in December 2019. The HFCAA legislation made it to the U.S. statute books in December 2020, toward the end of the Trump Administration. As an amendment to the Sarbanes-Oxley Act, its stated purpose was to require U.S. public companies to declare and prove that they are not owned or controlled by the Chinese government.
