Money Matters | Listing rules changes may give shell farmers reason to smile
If nothing else, tightening the controls on back-door listings will at least make manipulation of stocks more expensive
Speculators seldom grin when regulators talk about tightening controls. However, the Securities and Futures Commission’s suggestion to make mini-board listings more demanding seems to have done the trick.
And, it’s not hard to see why.
Imagine yourself controlling a handful of listed shells in the Growth Enterprise Market, which can easily be sold at no less than HK$300 million apiece nowadays.
A more stringent listing regime will only send the shell price up, given the long listing queue and high under-the-table costs in the A-share market.
This is exactly what has happened in the past two years after the watchdog tightened its grip by making the sponsor responsible for frauds and the wrongdoing of issuers.
“Shell farmers” – the nickname for a professional creator of listed shells – have chosen simple, basic and “hassle-free” businesses to secure a listing on the market.