HONG KONG (AP) – Alibaba’s choice of New York over Hong Kong for its blockbuster IPO was a blow for the Chinese financial center. Now, the city’s stock market is starting to rethink rules that stopped it from accommodating the Chinese e-commerce giant’s unique management setup.
As China’s leading financial center with its own currency and separate Western-style legal system, Hong Kong has been the traditional first choice for Chinese enterprises going public outside the mainland.
But Alibaba settled earlier this year on New York for its stock market listing after Hong Kong refused to make an exception for the company’s partnership system in which a small group of company insiders nominate the majority of the board of directors without owning a controlling stake.
The initial public offering may raise more than $24 billion, making it the biggest ever. Trading of Alibaba shares is expected to begin in New York later this week.
Executives at Hangzhou, China-based Alibaba said its partnership system was necessary for preserving the company’s innovative culture, but Hong Kong’s listing committee said it would go against the exchange’s “one share, one vote” principle that’s aimed at treating all investors equally.