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It publicly abandoned plans to list in Hong Kong last year, suggesting it would look to the U.S.. However, behind the scenes it was still looking at a potential Hong Kong IPO and hoping for a rule change that would accommodate its board structure. The company tried to rekindle talks with the exchange this year using different lawyers, but those talks have come to nothing.
Hong Kong authorities are drawing up a public consultation on whether the city ought to change its rules and allow different control structures through share classes or board arrangements, in order to attract tech companies.
However, the regulator is far from convinced there is any reason to alter its rules, and there are significant voices within both the stock exchange and the Listing Committee – which rules on IPO candidates – against a change.
"The basic issue is: would anyone be advocating a very significant potential change to the way in which shareholder rights are balanced if it were not for the potential competition, particularly from the U.S.?" said one person close to the Hong Kong authorities. "If that [competition] didn't exist, would anyone take a view that some companies have such special characteristics that they're treated differently?"
Joe Tsai, Alibaba's executive vice chairman, told Reuters on Thursday that the company would not ditch its partnership structure to list in Hong Kong, but said he respected the city's efforts to maintain "the integrity of the market".
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