Given the high volumes traded in Dingyi on the HKSE, I emailed the HKSE to find out the requirements for Dingyi to be able to de-list. Here is their response:
The Stock Exchange of Hong Kong Limited (the “Exchange”), a wholly owned subsidiary of HKEx, sets out below response to your enquiry:
You may refer to Listing Rules 6.11 to 6.16 for details of the requirements on voluntary delisting from the Exchange.
Under Rule 6.12, if the issuer primarily listed in Hong Kong (without alternative listing) proposes to delist from the Exchange, it must comply with the following shareholder approval and compensation requirements:-
(1) The issuer must obtain approval from its shareholders and holders of any other class of listed securities at general meetings, at which the issuer’s controlling shareholder (or if there is no controlling shareholder, directors other than independent directors and chief executive) must abstain from voting in favour of the proposal.
(2) The approval must be given by at least 75% of the votes attaching to any class of listed securities held by holders voting at the meeting, and the number of votes against the proposal must not be more 10% of the votes attaching to any class of listed securities held by holders entitled to vote at the meeting.
(3) The shareholders and holders of any other class of listed securities, other than the directors (except independent directors), chief executive and controlling shareholders, are offered a reasonable cash alternative or other reasonable alternative.
Please note that privatization by way of scheme of arrangement will be subject to Takeovers Code administered by the Securities and Futures Commission (the SFC).
Since we are not in a position to comment on any law or other regulations, you may consult the SFC for takeovers matters and other professionals advisers.
For your ease of reference, please click onto the following link for relevant Listing Rules:-
My comment: It seems like a difficult task to succeed given that 75% of votes must approve and no more than 10% vote against. So to speculate, the controlling shareholder of Dingyi could be buying up all the loose stock so that as per (3) above, he will have to part with less money to appease the minority shareholders. ie. the less minority shareholders there are, the less money he has to pay out. However, if this was his plan then wouldn't it be wiser to drive the price down similar to your typical pre-takeover offer action in order to shake the tree to take out the minority shareholders at a cheaper price and then pay a premium to get their votes
K2P Price at posting:
23.5¢ Sentiment: None Disclosure: Held
