An accountant has urged Hong Kong Exchanges and Clearing (HKEx) to combine two controversial delisting proposals, saying this would protect the interests of minority shareholders.
The proposals - a compulsory winding-up and a mandatory share buy-back - are among four suggestions for delisted stocks contained in a soon-to-be released HKEx consultation paper.
The other two are a 'third board' for delisted stocks or an over-the-counter (OTC) market operated by a third party.
Anthony Wu Ting-yuk, Ernst & Young chairman for Hong Kong, China and Far East, said he preferred a combination of a share buy-back and a winding-up.
'The winding-up of a company may sound quite scary to investors but in fact it would help them recoup their investment provided the liquidation can be done in a transparent way,' he said.
Mr Wu said that in the case of a company with a high net asset value and low market turnover and share price, minority shareholders would be trapped even if the shares were shifted to a third board or an OTC market.
'If these shares were trading at a low price for a long time and could not attract much turnover, it would not change much when they were shifted to other markets after being removed from HKEx,' he said.