Alibaba in stand-off with HKEx over Hong Kong IPO
Hong Kong regulators will not grant exemptions to the share sale even as the internet giant threatens to turn to NY over management control plan
Hong Kong stock market regulators will not grant any special exemptions to ensure a local share listing for mainland e-commerce giant Alibaba Group, sources with direct knowledge of the discussions told the South China Morning Post.
Alibaba has piled pressure on Hong Kong Exchanges and Clearing (HKEx), which has seen share listings fall 28 per cent in the first half of 2013 from a year ago, by threatening to take the potentially US$15 billion deal to New York unless a controversial plan to cement management control in founder Jack Ma Yun's hands is accepted.
If we want to introduce a dual shareholders structure, we would need to first do a public consultation, but at the moment we have no plan to do so
US listing rules allow a dual share structure that could grant Ma and Alibaba management the control they crave. Hong Kong rules do not.
"There will be no exceptions," a top official at the Securities and Futures Commission (SFC), the ultimate approver of share listings in Hong Kong, told the Post on condition of anonymity.
A source close to Alibaba said the firm neither wanted nor required a dual class structure.
Instead, it is proposing to use existing rules on board-level appointments to allow the firm's senior management to maintain a partnership structure to nominate a majority of board candidates, on whom shareholders would then be allowed to vote.
"The company is not asking the exchange to do anything special for it," said the source, who declined to be identified. "This solution would leave all shareholder rights intact."