Analysis-ASX to face investor push back on dual-class listing plans

Written by Scott Murdoch

Sydney (Reuters) – Australia’s plan to provide first -class dual shares to help revive the resistance of the weak inclusion market from the relevant investors, the structure will give a lot of power to some shareholders, including the founders.

Australian Stock Exchange told Reuters in March that it is considering allowing dual class lists to bring them with most major competitors including New York and London.

The dual -category structures usually have two or more shares with different voting rights. Companies may prefer such a list to reward the founders or executives, but some argue that the structure can reduce the rights of other shareholders.

This cash contributed to the shares of ASX Dual Class the last time the idea was presented in 2007. However, it pushed the lowest level in new lists and organizational calls to work to review the exchange factor.

ASX faces an arduous battle as box managers now, as in 2007, is still unbalanced. They said that the first -class dual shares will need to be sold at a discount in public subscription to attract local investors.

“Most of the fund managers will be very hostile to double -class shares,” said Hugh Daif, the chief investment official in the Money Money money that has $ 200 million (126.28 million dollars) of management.

“There are different interests to vote and we have enough problems led by the founder last year. Double-class dual shares will provide an inconsistent opinion based on economic interests-you can see an issue in which the founders get, for example, the amount of the saying is 10 times. This creates a lot of governance problems.”

Double stocks can give the founders more energy that the fund managers said it may be a deterrent to investment, especially in light of modern scandals that include the founders of Wisteche and Mineral Resources.

“The shareholders of the retail and the institutions may be deprived of the founders, and this is not perfect for these investors and we will not support this occurrence,” said Catherrona Burns, director of the portfolio in the Wilson Asset portfolio.

Stimulation

Blair Biton, CEO of ASX Group, said that the candidates in their inserts told the stock exchange that the double category shares were one factors when located the infection.

Technology companies usually have double -category shares, which led to the lack of major lists in Australia from this sector.

Biton said: “We know that there is a set of perspectives and ideas about dual stocks, yet we believe that it is important to continue to search for comments and inputs on measures that will help to continue supporting the dynamic lists and competition market globally.”