Hong Kong slams back door
April 1 will be a landmark date for Hong Kong's financial community, although the territory's tycoons and investors do not care much for April Fool pranks.
While many in the western world will be busy with fake extra-terrestrial sightings and bogus newspaper headlines, Hong Kong's equity market will focus on the serious matter of the end of "backdoor listings", which enable companies to list on the stock market without launching an initial public offering, and have been used by the territory's corporate chieftains for decades.
Large groups such as PCCW, now Hong Kong's largest provider of fixed-line telecommunications services, began life as public companies by injecting assets into listed "shells".
But from next Thursday, new stock exchange rules will force companies seeking backdoor listings to comply with the same standards as those going through the main door.
The most important of those is the requirement to have recorded a profit for the three years before the listing. Under the new rules, part of a package of corporate governance reforms, groups injecting large assets into a shell company would have to issue a prospectus instead of a simple stock exchange announcement.
In addition, unlisted companies buying listed shells in reverse takeovers will be banned from injecting substantial assets for the two years following the takeover.
Experts believe the new rules would have prevented two controversial deals in recent weeks: the spin-off of Hutchison Whampoa's fixed-line telecom business into a listed company it owned, and PCCW's backdoor listing of its property assets.
"A lot more people will now be going through the front door rather than the back door," says David Webb, editor of Hong Kong corporate governance watchdog webb-site.com.
Regulators hope the restrictions on backdoor listings will help to dispel the perception of Hong Kong as a market with inferior corporate governance standards to London and New York.
"The reputation of the exchange and investor confidence in our markets has been damaged by unqualified businesses circumventing the criteria that businesses going through the front door comply with," says Richard Williams, head of listings at the Hong Kong Stock Exchange.
Analysts believe the new rules will benefit retail investors, who are often exposed to higher risks due to the poor disclosure levels associated with backdoor listings.
"You didn't need the [profit] track record requirements of a new listing if you did one of these reverse takeovers," says Amar Gill, head of Hong Kong research at CLSA. "There was a lot of flexibility given to the companies and of course that was open to abuse."
The brief statements submitted by companies often sowed confusion and hit thousands of small investors - the backbone of Hong Kong's equity market.
Mr Gill pointed to the example of PCCW's backdoor listing of its property assets in shell company Dong Fang Gas Holdings.
In the excitement surrounding the transaction, retail investors misread the complex statement on the deal. They sent Dong Fang Gas shares sharply higher in the mistaken belief the stock would appreciate in value by 10 times on completion of the deal. When the stock crashed back down, hundreds of small shareholders were left facing large losses.
The new regulations should reduce the risk that retail investors will be left to foot the bill for the cozy deal-making of Hong Kong's tycoons.
However, according to Mr Webb, the new rules could still be circumvented. He said that one potential weakness in the regulations was the possibility of carrying out "creeping" backdoor listings.
Under this method, a buyer could take over a shell company and gradually begin injecting small amounts of assets.
By the time this was noticed by the exchange it would be too late for it to take action.
But even with this loophole, the regulatory changes will make the backdoor of Hong Kong's capital markets much narrower.
香港关紧"后门"
尽管香港富豪和投资者都对愚人节的恶作剧不屑一顾，可4月1日对香港的财金界来说，却具有里程碑的意义。
当西方国家很多人忙于伪造外空景观、杜撰重大新闻时，香港的证券市场却将集中精力于停止"后门上市"这一严肃问题。"后门上市"使公司不必首发即可上市，已被香港企业领袖运用了几十年。
一些大型集团，如香港目前最大的固网电信服务商--电讯盈科（PCCW）等，就是通过向已上市的"壳"注资，成为上市公司的。
但从下周四起，根据新的证券交易规则，试图借壳上市的公司必须遵守同普通上市公司一样的标准。
在这些规定中，最重要的是要求企业在上市前，必须保持3年赢利。新规则是一揽子公司治理结构改革的一部分。据此，向上市公司的壳大量注资的集团将不得不发表招股说明书，而不只是简单的上市公告。
另外，如果未上市公司通过反向兼并来购买上市公司的壳，那么在兼并后的两年内，将不得大量注资。
专家认为，新规则本来可以阻止近几周发生的两起有争议的交易：和记黄埔（Hutchison Whampoa）让产易股，将其固网电信业务注入其下属的一家上市公司；电讯盈科不动产业务借壳上市。
香港公司治理监督机构--webb-site网站的主编大卫o韦伯(David Webb)说："现在很多人都要走前门而不是后门。"
不少人认为，与英国伦敦和美国纽约相比，香港市场的公司治理标准较低。监管机构希望，对后门上市的限制将有助于消除这种看法。
香港证交所（Hong Kong Stock Exchange）上市业务主管理查德o威廉斯（Richard Williams）说："一些不合格的企业可以绕开正规上市所要遵循的标准，这破坏了证交所的声誉和投资者对市场的信心。"
分析师认为，新规则将有利于个人投资者。由于后门上市的信息披露不足，他们常常要冒更高的风险。
里昂证券（CLSA）香港研究部主管阿马尔o吉尔（Amar Gill）说："以前如果你要进行反向兼并，则不需要遵守有关新上市的（赢利）记录要求。公司拥有很大的灵活性，当然容易出现不正当行为。"
一些公司提交的简短声明，常常令人迷惑不解，并对香港股市的主体--成千上万的小型投资者造成打击。
吉尔先生以电讯盈科的房地产业务借东方燃气( Dong Fang Gas Holdings)的壳上市为例。
当时，受该交易的利好消息刺激，个人投资者误解了有关于此的复杂声明。由于误以为交易完成后东方燃气股价将上涨十倍，他们都爆炒该股票。当这支股票转为暴跌时，成百上千的小股东损失惨重。
新规则应该降低个人投资者为香港富豪的暧昧交易承担损失的风险。
不过，据韦伯先生说，新规则仍然可以被绕过。他说，该规则一个潜在的漏洞是，有可能出现"渐进爬行"的后门上市。
根据这种方法，收购方可以并购一家上市公司的壳，然后逐渐开始少量注资。
待到香港证交所察觉时，已来不及采取行动。
但即使存在这一漏洞，规则的修改也将使香港资本市场的后门更加难进。
