(Reuters) -A group of 17 Republican state attorneys general alleged that top U.S. asset managers, including BlackRock (NYSE:BLK) and State Street (NYSE:STT), were making improper or inadequate disclosures about their investments in China.
In a letter dated Thursday, the coalition said the companies were downplaying risks associated with China, such as its status as a "designated foreign adversary" of the U.S. or its "apparent intention to invade Taiwan".
The rebuke comes as a bitter trade war unfolds between the two biggest economies in the world, and will put asset managers to the test as they navigate an increasingly complex geopolitical landscape.
The letter was particularly scathing toward BlackRock, the biggest issuer of exchange-traded funds tracking emerging markets equities according to VettaFi's ETF Database.
BlackRock, in a post on X on Friday, said the AGs were "wrong in at least three significant claims" about the company's China disclosures.
Citing a publicly available fund document, BlackRock said it had clearly communicated the threat of a potential invasion of Taiwan, along with risks related to private property ownership and auditing practices in China.
U.S. authorities have previously scrutinized investment firms with exposure to China, citing concerns over potential human rights abuses and to curb the flow of American capital into a country they accuse of harboring ambitions to invade Taiwan.
Beijing denies allegations of human rights abuses and regards Taiwan as its own territory. Taiwan's government rejects those claims.
Besides BlackRock and State Street, the group also took aim at Invesco, JPMorgan, Goldman Sachs and Morgan Stanley (NYSE:MS).
JPMorgan, Goldman Sachs, State Street and Invesco declined to comment, while Morgan Stanley did not respond to requests for comment.
Contents of the letter were earlier reported by Bloomberg News and the Financial Times.