By Fathin Ungku
SINGAPORE Feb 16 Singapore took another step
towards making dual-class share structures a reality in the
city-state, with the Singapore Exchange Ltd (SGX)
kicking off a public consultation on the controversial market
SGX, which has seen a slump in initial public offerings
(IPOs) in recent years, said on Thursday the two-month long
public consultation will look into admission criteria and
safeguards against possible risks.
The structure of dual-class shares, which typically gives
one set of shareholders greater voting rights than others, has
been favoured by many owners of new age industries such as
technology, with the extra voting power given to top executives
seen as protection against pressure for short-term returns.
But the structure has also come in for criticism from
corporate governance activists, who have warned of its potential
abuse by company insiders.
The criticism is a key reason why the structure is still not
permitted in Hong Kong, despite a years-long debate sparked by
Chinese e-commerce giant Alibaba Group's decision more
than two years ago to make its record $25 billion IPO not in
Hong Kong but in New York where dual-class shares are allowed.
SGX also lost out on the IPO of Manchester United
to New York in 2012 because it could not obtain approval for a
dual-class share structure.
Worried about its competitiveness as an IPO destination,
Singapore has moved to re-examine its position on dual-class
shares, and last year SGX's Listings Advisory Committee gave the
stock exchange the green light to allow companies to list with
And earlier this month, a key Singapore advisory panel, the
Committee on the Future Economy (CFE), recommended the
introduction of the dual-class share structure as part of its
plan to ensure the city-state maintains an economic growth of
"If we collectively do this right... (dual-class share
structures) could radically change the business landscape,
create jobs and transform our economy," Chew Sutat, SGX's head
of equities and fixed income, told a news conference.
SGX is looking at an admission criteria "over and above"
current prerequisites such as a minimum market capitalisation of
S$500 million ($352 million) and prohibiting the issuance of
multiple vote shares for companies which are already listed, the
($1 = 1.4190 Singapore dollars)
(Reporting by Fathin Ungku and Anshuman Daga; Editing by Sam
Holmes and Muralikumar Anantharaman)