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If Singapore Wants a Facebook, Dual-Class Shares Aren’t Enough

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James Musick
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Singapore s move to allow more than one class of shares for its public companies won t be enough on its own to lure international businesses, according to executives and asset managers.Some of the world s largest companies, including Facebook Inc. and Alphabet Inc., have multiple share classes, which usually are in place to allow minority shareholders to have majority voting rights.

An independent body on Monday said it was in favor of permitting weighted-voting rights for new listings on Singapore Exchange Ltd., in what is the city s latest bid to draw initial share sales.The move may help narrow the gap with Hong Kong, Asia s biggest market for initial public offerings, where minority-control voting structures aren t permitted.

Hong Kong lost Alibaba Group Holding Ltd. s $25 billion IPO to the U.S. after regulators rejected the Chinese e-commerce company s governance structure.

Technology companies would typically first consider the Nasdaq and New York Stock Exchange, and then the Hong Kong stock exchange, said Chua Kee Lock, chief executive officer of Vertex Venture Holdings Ltd., a unit of state investment firm Temasek Holdings Pte.

Companies in Vertex s portfolio include Reebonz Pte, Southeast Asia s biggest luxury e-commerce company, and online grocer HappyFresh.

Until you attract good companies, no institutional investor will spend time, said Chua, the head of Singapore s largest venture capital firm.

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