Hong Kong fund managers seek more protection for minority investors under dual-class listings regime
HKIFA takes ‘positive approach’ in discussions with regulators over safeguards
Some of the world’s largest investment fund managers urged the Hong Kong stock exchange operator, Hong Kong Exchanges and Clearing (HKEX), to introduce more safeguards for protecting minority investors’ interests when the bourse allows multiple class shareholding technology companies to list from June, in a seminar on Thursday.
Many fund managers who are also members of the Hong Kong Investment Funds Association have opposed allowing dual-class shareholding companies to list in Hong Kong as this is in breach of the principle of “one share, one vote”.
“HKIFA still believes that ‘one share, one vote’ is best for investors. But with the listing reform a done deal, we will take a positive approach to discussions with the regulators to make sure they have sufficient safeguards [in place] for minority shareholders’ interests while allowing dual-class shareholding companies to list here,” said Sally Wong, the association’s chief executive.
Dual-class shareholding companies are favoured by technology firms such as Facebook and Google, as they allow founders and certain shareholders to retain more voting rights or dividends than other shareholders.
The mainland e-commerce giant Alibaba Group Holding, which owns the South China Morning Post, opted to list in New York in 2014 as Hong Kong has banned dual-class shareholding companies from listing since the mid-1980s while the United States allows it.
