The New Hong Kong Backdoor Listing Rules – Impact on Acquisitions and Disposals by Hong Kong Listed Companies

The Stock Exchange of Hong Kong Limited (the Exchange) has issued amendments to the Listing Rules and new guidance letters relating to backdoor listing and continuing listing criteria (together the “New Rules”), which take effect on 1 October 2019. While the New Rules are meant to address evolving market practices in backdoor listing and to regulate shell activities, they may also affect business expansion or diversification particularly those involving important strategic moves pursued by listed issuers. 

We will discuss in three parts the implications of the New Rules on listed issuers: first, on acquisition of business or assets; second, on disposal of a substantial part of an issuer’s existing business or assets; and third, on large scale equity fundraisings and maintenance of listing status.

Below are Part 1 and Part 2. Stay tuned for our Part 3.