HKEx chief Charles Li Xiaojia urges reform as Alibaba opts for New York
Hong Kong stock exchange chief not prepared to bend rules for HK$100 billion listing of tech giant but says structural reform is under way
Stock exchange chief Charles Li Xiaojia says the city must be ready to reform its share-listing rules if it wants to stay a globally competitive financial centre, but it was right to stick to principles that saw it lose out yesterday to New York for the potential HK$100 billion listing of Alibaba.
Li spoke to the South China Morning Post hours after mainland e-commerce giant Alibaba said it had picked New York after months of wrangling with Hong Kong regulators over its management structure that the Securities and Futures Commission said breached its "one shareholder, one vote" governance rules.
"Everything has a cost. Our persistence has a cost too," Li told the Post, but added that Hong Kong Exchanges and Clearing would continue with the review of its existing listing rules - which began after a stalemate with Alibaba last autumn - even though the deal was now dead.
We would not bend our existing rules just for one applicant
"The reform review in the HKEx will not stop because Alibaba has decided to list elsewhere," Li said. "We would not bend our existing rules just for one applicant, but Alibaba's proposal has propelled the management to review our operating model. The eventual loss may be even larger if we don't undergo reforms [of the] listing regime."
However, the stock exchange chief was careful to back regulation that many international investors - and the SFC - say define Hong Kong as a respected market in which to trade and invest.
"We feel proud of Hong Kong as we ensure that our rule of law and investor protection remain intact," Li said.
Hangzhou -based Alibaba, led by former English teacher Jack Ma Yun, said yesterday that it would begin the process for an initial public offering in New York.