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2017 (Mid Year)

“Hong Kong-listed companies have seen a surge in short-selling activity in recent years, with campaigns highlighting transparency and accounting practices. Hong Kong’s overall listing framework is currently under the spotlight, as the Exchange recently embarked on a market consultation on its proposals to reform its GEM Board and the launch of a New Board to attract new economy companies, including those with non-standard governance features.”

Cara O’Brien, Senior Managing Director

Country:
Hong Kong

Country: Hong Kong

Average % of insider ownership:

2.54

Activism
Threat Level


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 relative groups, limiting outsider opportunities to influence decision making. Shareholder activism is still in its infancy when compared to the U.S.

Shareholders reaching or exceeding the five percent threshold must disclose their voting rights to the listed company and the Hong Kong Stock Exchange within three business days.

A takeover by scheme of arrangement or capital reorganization must be approved by at least 75 of the voting rights present and voting at the general meeting, and votes cast against the takeover cannot exceed 10 percent of the votes associated with all disinterested shares. Shareholders with a conflict of interest must not abstain from voting on the resolution.

Additionally, shareholders with five percent or more of the company’s share capital, or at least two shareholders with 10 percent of voting shares, can require a general meeting.

Shareholder consent is required to amend senior executive remuneration, put in shareholder rights plans, and to issue shares according to a pre-existing employee share plan.

The Securities and Futures Commission does not allow 'frustrating actions' once a bona fide offer has been communicated to the board of a target company. These actions include issuing and redeeming shares, granting rights to subscribe for shares, selling or acquiring an asset of a material amount and entering into contracts outside of the ordinary course of business.


Top Campaigns by Type

1. Removal Of CEO Or Other Board Member
2. Major Business Fraud
3. Accounting Fraud

Campaigns By Year

Total
Campaigns

70

Notable Invested Activists

• Glaucus Research Group
• Elliott Management
• Argyle Street Management

Recent activism campaigns

Fullshare Holdings Ltd.
VS.
 Glaucus Research Group
Yingde Gases Group Company Ltd.
VS.
 Oasis Management Company
Man Wah Holdings
VS.
 Muddy Waters Research

Total Active
Campaigns

32

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