Dual-class shares put small investors at a disadvantage

I urge the public to be aware of the risks of subscribing to any dual-class share listing ("Dual-class shares - a must or a bust?"; Sept 14, and "SGX 'needs option of dual-class share listing'"; Sept 22).

Dual-class shares, simply put, give major shareholders more votes than small investors. This means the shares of small investors do not carry as much weight, and they essentially have no say in corporate decisions.

It suggests that the company is not genuinely interested in sharing its business with retail investors.

When many S-chips delisted, retail investors were burned and told it was their fault for not studying the companies carefully before purchasing shares. There is nothing to prevent the same thing from happening with dual-class shares. Small investors are put at a disadvantage right from the initial public offering.

In the light of this, the discussion on corporate governance will sound very hollow ("Code of Corporate Governance may need review: Regulator"; Tuesday), as one key role of corporate governance is to ensure fair play for small investors.

It again brings to mind the conflict of interest that the Singapore Exchange is facing in its dual role as operator and regulator of the stock market.

Geoffrey Kung Kuo-Woo

A version of this article appeared in the print edition of The Straits Times on September 30, 2016, with the headline 'Dual-class shares put small investors at a disadvantage'. Print Edition | Subscribe