June 26, 2018 / 10:21 AM / 6 months ago

Singapore details rules for offering dual-class shares, follows Hong Kong

SINGAPORE, June 26 (Reuters) - Singapore Exchange launched new rules on Tuesday to allow firms to list with dual-class shares, shortly after rival Hong Kong exchange introduced such funding structures favoured by tech firms.

Dual-class shares offer extra voting power to top executives seen as protection against pressure for short-term returns, but have faced criticism by corporate governance activists who have warned the structure could be abused by company insiders.

Their introduction in Asia puts the region on a more even footing with New York, which has managed to attract more Chinese tech initial public offerings via the structure.

“SGX today joins global exchanges in Canada, Europe and the US where companies led by founder-entrepreneurs who require funding for a rapid ramp-up of the business while retaining the ability to execute on a long-term strategy, are able to list,” said Loh Boon Chye, CEO of SGX.

The rules are effective immediately, SGX said.

Hong Kong Exchanges and Clearing Ltd launched its new rules from April 30, designed to attract companies with a market cap of not less than HK$10 billion ($1.27 billion) while Singapore will allow firms valued at S$300 million ($229 million) to list with dual-class shares.

Singapore on Tuesday set out various rules for dual listings designed to safeguard investors.

They include an equal voting process on issues such as removing directors, variation of shareholder rights and takeovers, and limiting holders of so-called ‘multi-vote’ shares to certain named individuals. (Reporting by John Geddie; Editing by Muralikumar Anantharaman)

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