Protecting minority shareholders in blockholder-controlled companies: evaluating the UK's enhanced listing regime in comparison with investor protection regimes in New York and Hong Kong

Barker, Roger; Chiu, Iris H‐Y

doi:10.1093/cmlj/kmu031

Cited by 11 publications

(5 citation statements)

References 10 publications

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“…So the more established the company, the higher the EPS it has, which then affects the lower initial return obtained by investors. With high EPS, the welfare of shareholders will increase, and conversely, low EPS means that the welfare of shareholders must still be improved (Barker & Chiu, 2015).…”

Section: Effect Of Earnings Per Share On Initial Returnsmentioning

confidence: 99%

Initial Returns Determinants with the Underwriter’s Reputation as a Moderating Factor

Pangestuti

2022

JASET

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Main purpose- The main purpose of this study is to find out the factors that affect the initial return. Accounting information and non-accounting information are components that determine the initial return that needs to be considered.Method - The population used is all companies that conducted initial public offerings (IPOs) on the Indonesia Stock Exchange (IDX) in the 2016-2020 period. In this study, the sampling technique used was non-probability sampling with a saturated sample technique of 135 companies. This study used multiple linear regression analysis to test its hypothesis.Main Findings-The results of the hypothesis testing concluded that the return on assets has a positive and significant effect on the initial return. The underwriter's reputation was able to moderate the relationship between return on assets and initial returns. The debt-to-equity ratio has a significant negative effect on the initial return. The underwriter's reputation was able to moderate the relationship between the debt-to-equity ratio and initial return. The current ratio positively and not significantly affect the initial return on investment. The underwriter's reputation was able to moderate the relationship between the current ratio and the initial return. The company's size positively and significantly affects the initial return. The underwriter's reputation was able to moderate the relationship of company size to initial return. Earnings per share have a negative and significant effect on initial returns. The underwriter's reputation cannot be moderated on earnings per share versus initial return. The price-earnings ratio has a positive but not significant effect on the initial return.Theory and Practical Implications - The findings of this study have implications for initial public offerings (IPOs) in the primary market, as well as parties who will conduct further research on factors that affect initial returns, such as issuers who will go public. These investors will make decisions about investing in companies with high underpricing rates. The results of this study are expected to contribute to the company or issuer, and also to investors who will invest that the underwriter's reputation can moderate the influence of ROA, DER, SIZE, and EPS on the initial return.Novelty- The novelty in this study is to use the underwriter reputation variable as a moderation variable that will strengthen the influence of the ROA, DER, CR, Ln Size, EPS, and PER variables on the initial return, whereas previous studies did not use it as a moderation variable.

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Section: Effect Of Earnings Per Share On Initial Returnsmentioning

confidence: 99%

Initial Returns Determinants with the Underwriter’s Reputation as a Moderating Factor

Pangestuti

2022

JASET

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“…106 The dual-voting structure is intended to give the independent shareholders a separate and stronger voice in the election of independent directors. 107…”

Section: United Kingdommentioning

confidence: 99%

A Comparative Analysis of Director Tenure in South Africa and Selected International Jurisdictions

Cassim

2021

CILSA

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Director tenure attracts attention worldwide and is increasingly being recognised as a crucial element in assessing an external (independent non-executive) director’s independence. Director tenure has recently come under the spotlight in South Africa. Shareholder activists are expressing disapproval of lengthy tenures of directors serving on boards of listed public companies and exerting pressure on long-serving directors to resign from office. This article examines whether the South African corporate governance principles regulating director tenure are adequate or in need of revision. The article examines further the corporate governance practices in leading jurisdictions such as the United Kingdom, Malaysia, Singapore, Hong Kong, and India that have recently revised their corporate governance practices. It then makes recommendations for enhancing the South African corporate governance approach to director tenure. It also calls on directors to collaborate with shareholders and independent external experts to examine their approach to director tenure and, if circumstances allow, revise the company’s memorandum of incorporation to limit directors’ tenure or provide for a staggered rotation of directors on the board.

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“…This requirement for an independent minority shareholder vote can mitigate expropriation by controlling shareholders. 105 In this case, controlling shareholders have an incentive to engage with minority shareholders who have a say in transactions. Asset sales or acquisitions and equity sales with related parties account for almost 50 per cent of RPTs in Hong Kong.…”

Section: Minority Veto Rightsmentioning

confidence: 99%

When Activists Meet Controlling Shareholders in the Shadow of the Law: A Case Study of Hong Kong

Lin¹

2019

Asian J. Comp. Law

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Shareholder activism has changed corporate governance around the world in the past decade. Conventional wisdom holds that shareholder activism is only effective in firms with dispersed ownership; there has been much less discussion on whether and how activism would work in firms with controlling shareholders. This article fills this gap by investigating whether and how legal mechanisms influence strategy planning and activism outcomes based on hand-collected data regarding activists’ initiatives against firms with concentrated ownership in Hong Kong from 2003 to 2017. This article finds that cases using formal legal mechanisms appear to have had a higher success rate. Among the legal tools available, minority veto rights are the most popular mechanism used by activists in Hong Kong, and are quite effective in leveraging their position in controlled firms. Furthermore, the availability of legal remedies and the ownership level of controlling shareholders are factors that influence activists’ strategies. Most activist initiatives against controlled firms involve corporate governance disputes where activists can rely on legal protection to enhance their bargaining position. On the other hand, activists tend not to make their demands public, and they also avoid exercising legal rights when controlling shareholders control the majority of the shares.

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Protecting minority shareholders in blockholder-controlled companies: evaluating the UK's enhanced listing regime in comparison with investor protection regimes in New York and Hong Kong

Cited by 11 publications

References 10 publications

Initial Returns Determinants with the Underwriter’s Reputation as a Moderating Factor

Initial Returns Determinants with the Underwriter’s Reputation as a Moderating Factor

A Comparative Analysis of Director Tenure in South Africa and Selected International Jurisdictions

When Activists Meet Controlling Shareholders in the Shadow of the Law: A Case Study of Hong Kong

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