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Caution urged on weighted voting plan

September 01, 2017

Many factors must be considered in terms of safeguarding investor rights when considering weighted voting rights for the stock market.


Acting Financial Secretary James Lau made the statement today in response to a proposal to set up a third stock exchange board allowing weighted voting rights that enable a concentration of power among shareholders even when they have a smaller stake.


Hong Kong Exchanges & Clearing has completed a consultation exercise on the proposed third board, which can attract Mainland technology startups and new economy firms.


He said factors such as the eligibility of new economy companies must be considered if the proposal is to be implemented.


"What about existing, already listed companies? Are those super-voting rights as I called them, are they transferrable from one guru to another? What about sunset clauses requiring actually a scaledown of the super-voting rights to a more normal level?


"What are recourses of shareholders if there should be decisions by these super shareholders which are apparently not in the interests of the overall company or the public investors?"


Mr Lau said these "tricky" issues need to be addressed by the Securities & Futures Commission and the HKEX.