Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 55

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 3
Chunk 55
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adequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.

On December 7, 2018, the SEC and
the PCAOB issued a joint statement highlighting continued challenges faced by the U. S. regulators in their oversight of financial statement
audits of U. S.-listed companies with significant operations in China. On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William
D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies
based in or have substantial operations in emerging markets including China, reiterating past SEC and PCAOB statements on matters including
the difficulty associated with inspecting accounting firms and audit work papers in China and higher risks of fraud in emerging markets
and the difficulty of bringing and enforcing SEC, Department of Justice and other U. S. regulatory actions, including in instances of fraud,
in emerging markets generally.

  33  

On May 20, 2020, the U. S. Senate
passed the Holding Foreign Companies Accountable Act (the “ HFCA”) requiring a foreign company to certify it is not owned or
controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject
to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities
are prohibited to trade on a national exchange. On December 2, 2020, the U. S. House of Representatives approved the Holding Foreign Companies
Accountable Act.

On May 21, 2021, Nasdaq filed
three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in a “ Restrictive
Market,” (ii) prohibit Restrictive Market companies from directly listing on Nasdaq Capital Market, and only permit them to list
on Nasdaq Global Select or Nasdaq Global Market in connection with a direct listing and (iii) apply additional and more stringent criteria
to an applicant or listed company based on the qualifications of the company’s auditors.

As more stringent criteria may
be imposed, including the HFCA, which became law in December 2020, our Ordinary Shares may be prohibited from trading if our auditor cannot
be fully inspected. The PCAOB issued a Determination Report on December 16, 2021 (the “ Determination Report”), which found
that