Bursa mulls dual-class share struc­tures

New Straits Times - - Business -

KUALA LUMPUR: Bursa Malaysia said it is con­sid­er­ing whether to al­low com­pa­nies with dual-class share struc­tures.

If the bourse op­er­a­tor goes ahead, it would be the third Asian ju­ris­dic­tion — af­ter Sin­ga­pore and Hong Kong — to take a close look at the con­tentious is­sue, open­ing an­other front in the bat­tle over share­holder rights.

The struc­tures give com­pany founders and lead­ers out­sized pow­ers that are seen by in­vestor ad­vo­cates as un­der­min­ing the “one share, one vote” sys­tem of cor­po­rate gov­er­nance.

Ap­proval by Bursa Malaysia would mean op­po­nents of the struc­tures would face an in­creas­ing num­ber of stock ex­changes will­ing to list firms with mul­ti­ple classes of stock.

“We may un­der­take a study on its fea­si­bil­ity and whether such a struc­ture is suit­able in the con­text of our cap­i­tal mar­ket,” said Bursa Malaysia this week in an emailed re­sponse to Bloomberg queries.

“Bursa Malaysia is al­ways open to ex­plor­ing new ar­eas in de­vel­op­ing our mar­ket to en­sure that we re­main com­pet­i­tive.”

The de­bate over multi-class shares in­ten­si­fied in re­cent weeks af­ter in­dex com­pil­ers FTSE Rus­sell, a unit of Lon­don Stock Ex­change Group Plc, and S&P Dow Jones Indices placed re­stric­tions on such struc­tures, un­der pres­sure from clients whose tril­lions of dol­lars track their gauges.

“Bursa Malaysia has worked very ef­fec­tively to im­prove the gov­er­nance foun­da­tions of the mar­ket, but even Bursa can­not re­sist the pres­sure to con­sider dual-class shares if Sin­ga­pore and Hong Kong ex­changes con­vince them­selves that quan­tity of ini­tial public of­fer­ings matters more than qual­ity of the over­all mar­ket,” said Melissa Brown, part­ner at fi­nan­cial ad­vi­sory firm Dao­bridge Cap­i­tal and a for­mer mem­ber of Hong Kong ex­change’s list­ings com­mit­tee. Bloomberg

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