Sen. Scott Questions SEC Over Chinese EV Firm Zeekr’s CCP Ties

Sen. Rick Scott (R-Fla.) speaks during a news conference in the U.S. Capitol in Washington on July 11, 2023. (Madalina Vasiliu/The Epoch Times)

Sen. Rick Scott (R-Fla.) is raising concerns about Zeekr, a Chinese electric vehicle maker that recently began trading on the New York Stock Exchange (NYSE).

In a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler dated May 30, Mr. Scott said Zeekr’s parent company, Zhejiang Geely Holding Group, has “close ties to the Chinese Communist Party (CCP).”

“I am concerned about the SEC’s process in determining and adequately disclosing the extent of Zeekr’s ties to the Communist China regime,” he wrote.

Shares of Zeekr under the ticker symbol ZK began trading on May 10. According to the U.S.-China Economic and Security Review Commission, 265 Chinese companies were listed on the New York Stock Exchange, NASDAQ, and NYSE American as of Jan. 8.

“The CCP’s ongoing authoritarian control over China’s economy and companies raises significant risks for U.S. investors, which is why this listing is deeply concerning, both to the integrity and strength of U.S. capital markets as well as the protection of American investors,” the letter reads.

Mr. Scott referenced a recent report published by the Senate Finance Committee, saying that some automakers “have alarming ties” to Chinese supply chains, tainted with forced labor and human rights violations.

Given that Zeekr is a Chinese firm and has ties to the CCP, Mr. Scott said he has “serious questions about how the SEC can be confident that Zeekr is not utilizing specific supply chains that rely on forced labor.”

The committee report, published in May after two years of investigation, identified BMW, Jaguar Land Rover, and Volkswagen AG for using parts by Sichuan Jingweida Technology Group, which was sanctioned in December 2023 when the U.S. Department of Homeland added the company to its entity list under the Uyghur Forced Labor Prevention Act.

The act, which went into effect in June 2022, bars imports from China’s far-western region of Xinjiang unless companies can prove products weren’t produced with forced labor.

The CCP has locked up over 1 million Uyghurs in Xinjiang’s internment camps, where detainees are subjected to forced labor, torture, political indoctrination, forced abortion, and other inhuman treatments. The U.S. government has designated China’s suppression in Xinjiang as “genocide” and “crimes against humanity.”

In an effort to address his concerns about Chinese firms’ inadequate disclosures to the SEC, Mr. Scott noted in his letter that he had introduced the Securing American Financial Exchanges (SAFE) Act (S.854) and the Transaction and Sourcing Knowledge (TASK) Act (S.864).

The two bills were part of five that Mr. Scott introduced in March last year to combat the CCP’s influence in the U.S. financial sector.

According to a statement, the SAFE Act would require the SEC to implement specific disclosure requirements for Chinese-based companies seeking to launch initial public offerings (IPOs) on U.S. exchanges.

The TASK Act would “direct the SEC to disclose the sourcing and due diligence activities of all listed companies involving supply chains that are directly or indirectly linked to products and services utilizing forced labor from the Xinjiang region,” according to the letter.

Mr. Scott asked Mr. Gensler to respond to several questions in a timely manner. For example, the senator wanted to know if Zeekr had received any financial support from the CCP, what steps the SEC had taken to ensure that Zeekr’s supply chain “is free from forced labor and human rights abuses” when approving its IPO, and whether Zeekr had done businesses with Chinese firms currently on entity lists maintained by the U.S. Treasury,  Commerce, and Defense departments.

“What assurances did Zeekr provide the SEC that U.S. investors will have adequate legal recourse and protections if they suffer losses due to the company’s actions or the actions of the Chinese government?” asks another question in the letter.

Mr. Scott said that it was important that U.S. investors are informed about Chinese companies such as Zeekr.

“We must ensure our financial exchanges are not promoting U.S. capital investment in companies with ties to countries that want to destroy America. This undermines not only our national security, but the integrity of U.S. capital markets as a whole,” the letter states.

Representatives of Zeekr didn’t respond by press time to a request by The Epoch Times for comment.