Hong Kong stock exchange defers consultation on further listing reform in latest blow to tech IPO ambitions

Hong Kong’s stock exchange operator has deferred a planned consultation on expanding listing reforms to allow corporate investors to own premium shares with greater voting rights in companies that have a so-called dual-class share structures.

The decision is a further setback for the sweeping reforms, which have so far failed to generate the much hoped-for slew of applications from big technology firms eager to raise capital on the city’s bourse.

The exchange introduced new rules in April to allow companies with dual-class shareholding rights, or weighted voting rights, to list here. The reform allows individual founders or certain key executives of these companies to own shares that carry more voting rights than those of other shareholders. The move was aimed at attracting more technology companies, which tend to favour this structure.

Hong Kong Exchanges and Clearing (HKEX) had said initially it would launch a separate consultation by July 31 on whether it should also allow companies to own the special voting-class shares. The bourse, however, said in a statement on Wednesday that this consultation would not be launched after all.

It said: “Given that the current weighted voting-rights regime has only recently been put in place, the exchange believes it should deliberate further the extended weighted voting-rights regime and should continue to engage with relevant stakeholders to develop a broader consensus on the subject matter.

“Accordingly, the exchange has decided not to launch a corporate weighted voting-rights consultation at this time as initially planned. The exchange will update the market on the subject in due course.”