Date
20 August 2017
Alibaba has opted to list on the New York Stock Exchange after Hong Kong regulators rejected its dual-class share structure plan. Photo: Reuters
Alibaba has opted to list on the New York Stock Exchange after Hong Kong regulators rejected its dual-class share structure plan. Photo: Reuters

There are still ways to win Alibaba listing, HK regulators told

Hong Kong missed the chance to host what is bound to be the world’s biggest-ever initial public offering in the technology sector, but there are still ways to convince Alibaba Group Holding Ltd. to hold a secondary listing in the city.

Bonnie Chan, a member of the Financial Services Development Council, a government advisory group, has urged Hong Kong regulators to grant exemptions to Alibaba or amend the requirements under the existing regulatory framework for listing overseas companies, the Hong Kong Economic Journal reported on Thursday.

The proposed amendments and exemptions, which could be done more quickly than revising the city’s listing rules, would pave the way for Alibaba to list in Hong Kong, Chan said.

Chan’s suggestions include deleting the requirement that the company’s core business has to be located outside the Greater China region, as stipulated in the Joint Policy Statement Regarding the Listing of Overseas Companies since 2013.

The Hong Kong stock exchange can also grant any exemptions if needed, according to the current listing rules, he said.

The joint policy statement, in fact, requires companies seeking a secondary listing in Hong Kong to comply with the principle of treating all shareholders in a fair manner, which means the company cannot use a dual-class share structure.

David Webb, former director at Hong Kong Exchanges and Clearing Ltd. (00388.HK), said Chan’s proposal is not viable and that exemptions should only be given to exceptional cases.

Accounting veteran Roy Lo Wai-kei also said exemptions are normally granted to those companies that cannot fulfill certain criteria within a particular period. Regulators will be inviting a lot of controversy if they exempt Alibaba from the “one share, one vote” principle, Lo was quoted as saying.

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