* Singapore may become first Asian bourse with split share
* Boldest move in years could help make Singapore a tech hub
* New structure gives executives greater voting power
SINGAPORE, March 16 (Reuters) - Singapore's plans to become
the first Asian bourse to allow dual class share listings is
catching the attention of tech entrepreneurs and could help turn
a staid market into a buzzing tech hub, as the city-state looks
to rebrand its image.
Singapore Exchange's boldest move in years is
designed to make it the go-to-place for potential IPOs for
Southeast Asian start-ups, such as ride-hailing services Grab
and GO-JEK, and online retailers Tokopedia and India's Flipkart.
Such a change, if approved, would support the Southeast
Asian financial hub, which is battling the impact of cooling
global trade, a downturn in its key offshore support services
sector, and a spate of delistings.
Singapore could by the end of this year implement a split
share system that allows entrepreneurs to retain control even
with minority stakes, by giving some shares more weight.
"It's a game changer," said Vinnie Lauria, a founding
partner at Golden Gate Ventures, a Southeast Asian venture
capital firm which has invested in over 30 companies across more
than seven Asian countries.
"These companies want to have the voting power and the
controlling shares within a small group of people who have been
really involved since the beginning."
Dual class share listings (DCS), which are allowed on the
New York Stock Exchange and Nasdaq, give extra voting power to
protect executives from shareholders obsessed with short-term
gains. The structure has been embraced by companies such as
Facebook, LinkedIn, and high-valued tech startups known
Bankers and lawyers say the changes would put Singapore on
the Asian tech industry's short-list, especially given that
local exchanges typically offer richer valuations to regional
firms when compared to U.S. exchanges.
Patrick Grove, co-founder and CEO of Southeast Asian
internet firm Catcha Group, has been favouring a U.S. IPO but
said he would "strongly consider" SGX if it launched the dual
"We've been impressed with what SGX has done to become a
more favourable financial tech hub in the region," said Grove,
who has taken five companies from start-up to IPO in Australia
and Malaysia. He declined to give details of the planned IPO.
The share structure got attention in Singapore in 2012 when
Manchester United jilted the city state over efforts by the
Glazer family to retain control through an IPO using this
In Asia, such share structures are almost unheard of,
although technically possible in particular cases in Tokyo and
The Hong Kong bourse proposed weighted voting rights in 2015
but failed to get regulatory support.
SGX, a global centre for business trusts and real estate
investment trusts, is seeing an opportunity to fill the void and
broaden its appeal to tech and other new economy companies.
This chimes in with the city-state's moves to provide
funding and light-touch regulation, as it seeks to reinvent
itself as a fintech and disruption hub.
A key Singapore advisory panel last month recommended the
new share system with appropriate safeguards to widen public
SGX is closing in on a public consultation that is open till
mid-April. Based on feedback, it will then launch a second
If regulators give this a green light, the new rules could
be in place as early as end-2017.
Chew Sutat, SGX's head of equities and fixed income, said
that any actual implementation will depend on responses received
in the consultations.
The new system could inject some much-needed vitality to an
exchange that has seen a decline in turnover, and fewer company
listings due to low valuations and insufficient liquidity.
Fund raising via IPOs at SGX, where about 40 percent of its
over 700 listed companies originate outside the country, slumped
to its lowest in 17 years to just $335 million in 2015 before
rebounding last year.
"It's a step in the right direction. But it still boils down
to liquidity and valuation," said Chua Kee Lock, CEO of
Temasek's Vertex Venture Holdings, adding that the next step
would be to attract tech investors who trade in public stocks to
One of the main challenges SGX faces is opposition from
corporate governance campaigners such as Aberdeen Asset
Management, who say weighted voting rights sideline ordinary
"Whether these companies ultimately list here will come down
to a multitude of factors," said Stefanie Yuen Thio, joint
managing director at law firm TSMP. "But not allowing DCS
effectively closes the door to such listings, which would be a
disaster for the SGX."
(Additional reporting by Clara Ferreira Marques, Marius Zaharia
and Aradhana Aravindan; Editing by Randy Fabi)