ACGA Statement on SGX Dual-class Shares Announcement


"ACGA regrets the decision by SGX to encourage dual-class shares (DCS) in listed companies in Singapore. While today's announcement is restricted to clarifying that SGX listing rules already permit secondary listings of DCS firms from developed markets, this "backdoor" approach arguably opens the door to allowing DCS in primary listings in Singapore in future. It may also give significant encouragement to a plan by Hong Kong Exchanges and Clearing to introduce DCS through a new third board, a move that we believe will likely limit the number of DCS listings in Singapore. And we question whether Singapore-based investors would be able to effectively access the investor protection mechanisms in the primary markets of DCS firms.

"At a time when Asia markets have an opportunity to differentiate themselves from low common denominator regulatory practices in certain developed markets, we are saddened to see Singapore, hitherto a leader in Asian corporate governance, starting a possible race   to the bottom.

"DCS is a short-term, counterproductive policy that also directly undermines "investor stewardship", the idea that institutional investors should be actively interested in corporate governance, invest responsibly and engage with companies.

"In ACGA's 18 years of corporate governance research and advocacy in the region, we have watched with respect the efforts of governments and regulators to raise corporate governance standards and strengthen their capital markets. We believe that lowering the bar is not a sensible strategic decision."