Why did Hong Kong replace our ‘One Share, One Vote’ principle for dual-class stocks?
With all these tech and “new economy” IPOs in Hong Kong, I can’t think of a single, defensible reason for scrapping our “One Share, One Vote” principle.
HK revamps listing rules in battle for global tech giants -- SCMP headline, December 16
This latest attempt by Hong Kong’s stock exchange chief executive Charles Li Xiaojia to destroy shareholder democracy has an offhand way of dismissing his earlier, overly ambitious attempt to do away with all significant listing requirements.
That earlier concept paper in 2015 was only a “straw man”, says this latest concept paper; meaning, I take it, that it was an intentionally false proposal we were meant to knock down, so as to make it easier to introduce the real one.
Oh, thank you, Charles. So kind of you to waste our time. How very thoughtful of you.
But the real one (let’s hope it’s not just another straw man this time) does have one brand new idea: it is to allow listing by “pre-revenue” biotech companies, as long as they have a “minimum expected market capitalisation” of HK$1.5 billion (US$192 million).
I shall ask the obvious question for you: If they are not yet selling anything, leave alone turning any profit, on what basis can the market be “expected” to value them?
