Financial Secretary John Tsang calls for debate on IPO rules
Tsang says public consultation is needed before changing rules for listings, in the wake of Alibaba's controversial demands
The public should be consulted before any change to listing rules at the city's stock exchange, Financial Secretary John Tsang Chun-wah said yesterday.
He made the comment after mainland e-commerce giant Alibaba said last week it was delaying plans for an initial public offering - potentially a HK$100 billion deal - to allow the controversy over its preferred share structure to die down.
Tsang said he was open-minded about whether the listing rules should be changed or not.
"This is a matter for the market to decide," he said, adding that if changes were to be pursued, consultation was necessary.
His remarks followed a call from Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia in his blog last week that consideration should be given to non-standard shareholding structures for "innovative companies".
Rumours circulating in the market yesterday said a timetable for consultation to pave the way for Alibaba's listing plan would be set at an HKEx quarterly meeting tomorrow.
HKEx declined to comment. "It is a decision of the stock exchange listing committee and the Securities and Futures Commission if a market consultation on shareholding structure will be conducted," it told the South China Morning Post.
Christfund Securities research director Simon Lam Ka-hang said he would support discussion of the listing regulations but would vote against any changes to them.
"The current listing rules should not be changed because the interests of small shareholders must be protected," Lam said. "As an investor, I welcome any company to come and list in Hong Kong, with a precondition that it protect the interests of small shareholders."
Alibaba abandoned a listing in Hong Kong just weeks ago because regulators would not allow the company's partners - including founder Jack Ma Yun and some senior executives - to nominate the majority of directors on its board.
Regulators said the so-called partnership structure gave one group of shareholders more power than another and breached the "one shareholder, one vote" principle that underpins Hong Kong's securities laws.
Tsang said it was important to solicit views from market participants and compared Hong Kong to the Wimbledon tennis championships, saying no rules could be changed if the game was under way.
"I recently read a book that said Hong Kong is like Wimbledon and that people come here to play," he said. "It is important that we have rules that are clear, we have rules that are consistent and that it is transparent to everyone."
Ma said in Hangzhou last week that Alibaba would hold off on a listing for the foreseeable future.