By Denny Thomas and Elzio Barreto
HONG KONG Jan 9 The Hong Kong stock exchange
has submitted a draft report to the Securities and Exchanges
Commission that could lead to new shareholding structures for
publicly listed companies in the city, a person familiar with
the matter said on Thursday.
The submission brings closer the launch of a public
consultation process on allowing different shareholding
structures for Hong Kong initial public offerings.
The move comes after Hong Kong regulators in 2013 rejected
Internet giant Alibaba Group Holding Ltd's planned IPO because
of the firm's request to keep a shareholder structure allowing a
group of top managers and founders - who together own only
around 13 percent of the company - to nominate and control the
board. That request went against the exchange's
Hong Kong Exchanges and Clearing Ltd (HKEx), the
stock exchange operator, said in November it was considering
launching a public consultation.
Such a process could take months, but an agreement allowing
different structures would be a major step in allowing Alibaba
to list in Hong Kong - though it's unclear if the company would
wait that long.
Any rule change proposed by the exchange would have to be
approved by the SFC, which met with Alibaba last year when it
first explored a Hong Kong listing.
The regulator is concerned at how dual class share systems
like the ones used in the United States could work in Hong Kong
given it has a very different regulatory structure, a source
The SFC and the HKEx declined to comment.