More than 40 lawmakers are calling for an investigation into the China’s Chongqing Casin Enterprise Group’s purchase of the Chicago Stock Exchange, citing concerns that the takeover could allow the Chinese government to manipulate U.S. equity markets.
“While it is unclear the level of influence the state holds over CCEG, the firm is involved in a number of important Chinese sectors that would likely require close ties to the state,” 45 Republican House Members and one Democrat wrote in a letter dated Tuesday to the Treasury Department’s Committee on Foreign Investment in the United States (CFIUS).
“Additionally, the chairman of CCEG, Shengju Lu, holds a seat on an important industry committee overseen directly by the mayor of the Chongqing Municipality – implying a direct political connection,” it added.
According to the lawmakers, if the transaction were allowed to proceed, it would be the first time a “Chinese-owned, possibly state-influenced” was granted had access to “the $22 trillion U.S. equity marketplace.”
The group, led by Rep. Robert Pittenger (R-NC), is requesting a “full and rigorous investigation” of the acquisition. In their letter, the lawmakers cited transparency concerns about CCEG and the Chinese government, arguing that the takeover could represent a security concern.
“Transparency concerns extend to every aspect of China and its governance, including into their marketplace, military, maritime claims, space activities, human rights violations, foreign investment practices, law enforcement practices, currency treatment, treatment towards journalists and dissidents, and various ongoing cybersecurity and espionage activities,” they wrote.
“CCEG is no different – the American market has little information about CCEG, and it shares many of the traditional opaque qualities of a Chinese company,” they added.
The Chicago Stock Exchange announced the planned sale to CCEG earlier this month.
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