No dual-class listing, says Bursa

According to the local bourse, it is committed to upholding market integrity and ensuring sound investor protection

By NG MIN SHEN

The listing of dual-class shares on the local bourse will not be taking place anytime soon, according to Bursa Malaysia Bhd.

The exchange holding company said in a recent statement there have been “some misleading reports of late, which have caused confusion on Bursa Malaysia’s position on the listing of dual-class shares”.

“Bursa Malaysia’s position has been misunderstood and taken out of context. We wish to inform that presently, we have no plan to facilitate the listing of dual-class shares,” it said.

In its pursuit to remain attractive and competitive, Bursa Malaysia said, it is committed to upholding market integrity and ensuring sound investor protection in all its market development initiatives.

A dual-class share structure involves issuing various types of shares by a single company, where each class has different voting rights and dividend payments, among other variances.

Such structure usually sees one class of stock with limited voting rights being offered to the general public, while another class with more voting power — and often, majority control of the company — is being offered to founding shareholders and family members.

Dual-class shares, also known as weighted voting rights, are often favoured by tech companies as the structure allows them to innovate without being hindered by shareholders forcing them to change course.

Facebook Inc has said the dual- class model allows its founder and CEO Mark Zuckerberg to focus on the company’s long-term vision, minus the distractions of short-term pressures.

Other notable companies with dual-class share structure include Alibaba Group Holding Ltd, which passed over Hong Kong in favour of the New York Stock Exchange — which allows dual share listings — for its US$25 billion (RM107.25 billion) listing, as well as Baidu Inc, also a Chinese-based firm, and Google’s parent Alphabet Inc.

Many bourses worldwide permit dual-class shares — including countries like the US, Canada, France, Sweden, Italy, Switzerland, Denmark, Russia, Finland and Brazil.

South Korea, Spain and India do not allow the structure; a key reason is the implications on corporate governance as it enables certain stakeholders to exert more power over a company, despite holding less stock and thus providing less capital than others.

The dual-class model has been the talk of the town on this side of the world lately, with Hong Kong Exchanges and Clearing Ltd having said in January it is debating opening a new exchange that allows dual-class shares after its 2015 proposal was rejected by its regulator.

Meanwhile, Singapore Prime Minister Lee Hsien Loong in February approved a plan to drive economic growth for the next decade — a plan which includes dual-class shares.