HONG KONG (Reuters) - Global fund managers of nearly US$14 trillion (S$17.5 trillion) in assets support Hong Kong's "one share, one vote" principle, and oppose changing listing rules to allow non-standard shareholding structures, the Asian Corporate Governance Association (ACGA) said on Tuesday.
The association questioned 54 portfolio managers and corporate governance officers about proposals discussed during Hong Kong regulators' talks last year with Chinese e-commerce giant Alibaba Group Holding, ahead of a possible listing.
Regulators dismissed Alibaba's request to allow a small group of company insiders nominate the majority of its board, prompting the company to consider New York for a possible initial public offering worth over US$16 billion.
In the survey, 51 respondents were against such non-standard partnership structures where partners can nominate the majority of a company's board of directors. Most also said they would demand a discount of up to 25 per cent on the share price of a company using such a structure in Hong Kong.
All but one respondent also opposed the notion of two classes of shares under which controlling shareholders have more votes than other shareholders.
"We are pleased to see such firm support for equal treatment of all shareholders," said ACGA Secretary General Jamie Allen in a statement. "Any deviation from equal treatment would compromise investor protection irreversibly and exemptions for so-called innovative companies would likely backfire against Hong Kong."
Hong Kong Exchanges and Clearing Ltd (HKEx), on whose bourse Alibaba sought to list, did not offer an immediate comment.
When asked about Alibaba's partnership structure in particular, 38 respondents said it would have a "negative valuation effect" on the company, with 20 saying they would apply "governance discounts" ranging from 5 per cent to 50 per cent.
"We're not against Alibaba listing in Hong Kong," Allen said in a briefing. "We simply don't support its request to list with a special partnership structure that undermines the one share, one vote and investor protection in Hong Kong."
An Alibaba spokeswoman said in a statement the company supports Hong Kong as a place for entrepreneurs, and that it welcomes views consistent with that development. "We respect the policies of Hong Kong and will continue to pay close attention and support the process of innovation and development here," the spokeswoman said.
The association sent the survey in December to more than 70 members, most of whom were institutional investors headquartered or with offices in Hong Kong, but also based in New Zealand, Europe and North America. It compiled the results in the first quarter of 2014.