Laws and regulations of the Hong Kong market can be modified according to the situation of development and change

Although the laws and regulations of the Hong Kong market can be modified according to the changing situation, the relevant laws and regulations must be complied with without any changes, and no one has "privileges".

Alibaba's Road to Hong Kong listing was terminated by the lack of a green light from HKEx. September 25, there is news that Ali Group and HKEx negotiations broke down, Alibaba will be listed in the United States. On the evening of September 26, Tsai, co-founder of Alibaba Group and executive vice chairman of Alibaba Group, said: "We do not expect Hong Kong regulators to make changes to a company in Alibaba." It also confirms the fact that Alibaba's Hong Kong listing plan has been turned down.

Alibaba's listing is a huge temptation for HKEx. According to the investment bank's valuation, Alibaba's current market capitalisation is as high as $120 billion, which is the third-largest internet company after Google and Amazon. The firm reckons Alibaba's IPO financing is close to HK $100 billion (USD 12.9 billion). According to Bloomberg, Alibaba's fundraising will be the world's largest IPO in addition to Facebook, compared with the estimated $12.9 billion trillion, and the biggest IPO in Hong Kong, with the exception of AIA's 20 billion-dollar equity offering. Therefore, if Alibaba can successfully listed in Hong Kong, Hong Kong's weak new share market is undoubtedly a "strong heart".

But Alibaba is a hot potato for HKEx. Alibaba listing can only take the form of "partner", which is currently not allowed by HKEx's listing rules.

Alibaba advocates "partner" plan, obviously is because of the company management that is represented by Ma Yun is unwilling company control right passed. Alibaba from the current shareholding structure, to Ma Yun and management is very unfavorable, Count Ma Yun himself owned Alibaba Group 7.4% of the stake, the entire management of the proportion of the shareholding is only 10.4%. While SoftBank and Yahoo each hold 36.7% and 24% per cent of Alibaba Group, two foreign-owned voting rights and board seats are clearly enough to control the entire company.

The "partner" scheme advocates "different rights": The Company is nominated by a group of people referred to as "partners", rather than the right to nominate directors on the basis of the proportion of shares held. A partner can only nominate a director, but not directly, and the appointment of a director still needs to be approved by a general meeting of shareholders. But even if the shareholder rejects the nominated director, the partner can continue to nominate until the main board is nominated by the partner. Such a partnership scheme is actually a way for a handful of management to take control of the company. Other investors, even if they hold more stakes, cannot participate in the company's management because they cannot access the board.

At present, the listing rules of HKEx insist on the principle of "same-share right". As a result, HKEx eventually gave up Alibaba's listing plan and gave up the temptation of Alibaba's listing for the Hong Kong market. The HKEx's decision is worthy of respect. Because this decision is to protect the interests of the vast majority of investors, but also to the Hong Kong market policy and regulation of the authority of a maintenance, this will also uphold the dignity of the HKEx, is the HKEx made the "most suitable and most conducive to Hong Kong's decision."

Not only that, the HKEx's rejection of Alibaba's listing plan is also a warning to mainland Chinese listed companies that the listing must comply with the laws and regulations of the Hong Kong market. Although the laws and regulations of the Hong Kong market can be modified according to the changing situation, the relevant laws and regulations must be complied with without any changes, and no one has "privileges".