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2016 (Mid Year)

“Most companies in Hong Kong are owned by families and close relatives; however a recent trend towards diversification has left some companies more susceptible to shareholder activism.”

Paul Marriott, Senior Managing Director

Country:
Hong Kong

Country: Hong Kong

Average % of insider ownership:

3.58
Activism Threat Level: 4.25

To learn more about this country, please click on the tabs below

  1. Country Summary
  2. Disclosure
  3. Shareholder Rights
  4. Company Defense

Similar to China, retail investors make up a significant portion of Hong Kong’s investor base (39 percent in 2015). Additionally, most companies are still held within families and close relatives, limiting outsiders’ opportunities to influence decision making. Shareholder activism is still in its infancy when compared to the United States. However, regulators’ increased scrutiny on companies in an effort to move closer towards best practices in governance and transparency comes in parallel to a rising number of shareholder activism cases.

Shareholders (and investors with short positions) reaching or exceeding the 5 percent threshold must disclose their voting rights to the listed company and Hong Kong Stock Exchange within three business days.

In order to decide on a takeover, approval by shareholders holding 75 percent of voting shares, with 10 percent or below votes cast against the takeover, is required. A similar 75 percent requirement is necessary in order to decide on whether to reduce the company’s share capital or to buy back shares. Additionally, shareholders holding 5 percent or more of share capital can request a general meeting or at least two shareholders holding 10 percent of voting shares can convene a meeting.

Poison pills require shareholders’ consent to amend senior executives’ remuneration or issue shares according to a pre-existing employee share plan. The Securities and Futures Commission provides exemptions to some ‘frustrating actions’ including issuing and redeeming shares, granting rights to subscribe for shares, selling or acquiring an asset of a material amount, entering into contracts outside of the ordinary course of business.


Top Campaigns by Type

1. Major business fraud
2. Accounting Fraud
3. Gain Board Representation

Campaigns By Year

Total
Campaigns

32

Notable Invested Activists

• Glaucus Research Group
• Elliott Management
• Kerrisdale Capital Management

Recent activism campaigns

Tech Pro Technology Development Limited
VS.
 Glaucus Research Group
China Mobile
VS.
 Indus Capital Partners
Bank of East Asia
VS.
 Elliott Management

Total Active
Campaigns

2

Contact FTI Consulting

Geoff Serednesky

Capital Markets Research and Activist Engagement
Managing Director
+1 312 861 4721
Geoff.Serednesky@FTIConsulting.com

Cara K. O'Brien

Senior Managing Director
+852-3768 4537
Cara.Obrien@fticonsulting.com