Weighted voting rights – increasing governance risk in Hong Kong

Jamie Allen represented ACGA at the Hong Kong Society of Financial Analysts' seminar "Weighted Voting Rights at HKEX - an exciting era for new economy companies?" on 11 July 2018.

In his presentation, "Weighted voting rights – increasing governance risk in Hong Kong", he provided a short overview of the history of dual class shares (DCS) in HK; the downfalls of having DCS in the territory, and over the longer term; issues associated with stewardship. The presentation concluded with an overview of CG Watch scores. The presentation can be downloaded below.

Synopsis of the seminar
With a view to encouraging new-economy companies to list in Hong Kong, Hong Kong Exchanges and Clearing Limited (HKEX) proposed new rules to broaden the listing regime on 30 April. Under the new rules, HKEX allows the listing of three types of companies, namely pre-revenue biotech companies, innovative companies with a WVR structure and US or UK-listed companies looking for a secondary listing. 

HKEX has accepted listing applications and some new-economy companies may float as early as June this year.

In particular, WVR structure, which gives some shareholders greater voting rights than others, has been adopted by many technology companies in the US. While senior management in these companies views the extra voting power given as protection against short-term interests, other investors have concerns on their corporate governance.

We therefore gather speakers from corporate governance association and digital media etc to explore WVR from a corporate governance perspective.

HKSFA is excited and honored to welcome Mr. Jamie Allen, Secretary General of the Asian Corporate Governance Association (ACGA), to kick off the seminar and explore with the audience “WVR from a Corporate Governance Perspective: The Case Against”.  Following that, Mr. Ray Chan, CEO and co-founder of 9GAG, will walk us through “WVR from an entrepreneur/startup's perspective”.

More information is available at the HKSFA website.