(14%) In recent years, Hong Kong introduced the dual-class share structure

Hong Kong didn't allowed dual class share structure before 2018 because at earlier times there were not so many companies who are emerging in these days with dual class structure, but now a lot of companies have been emerged naming Pinterest, Lyft, Xiaomi, Snap, Facebook, Alibaba and LinkedIn who opted for Dual class structure, often referred to as weighted voting rights(WVR), as it's basic concept is to issue share with differential voting rights, that is in making the bifurcation particularly between the owners and the general public, where majority voting rights shares are issued to the owners and shares with no or very less voting rights are issued to general public.

Hong Kong is required to make the reform, majorly due to Alibaba, and due to other companies as well. Alibaba, since is unable to issue the shares with differential voting rights, in Hong Kong, hence it listed it's shares in NYSE, where it is permitted to issue WVR shares, apart from them, a majority of the countries are also allowing such shares, that's why Hong Kong re allows the issue of these shares.

This method can lead to several advantages, such as:-

Majority of the control being with the owners, they can focus on the growth of the company and look into the long term aspects of the company.

Control being with the owners, they can protect the long term interest of the co.

Company will focus, having regard to maintaining the business for a longer time period unlike that of the investors, who are interested in earning short term profits.

There are several negative effects of this method such as they are fundamentally unfair as they tend to create a limited class of shareholders

The manager that holds majority stocks and the remaining shareholders have discrepancies which reduce accountability.

Company is not so motivated to raise funds.

Once converted into this structure, it will be very difficult to reintroduce the normal system

To prevent the costs or negative effects of this system, despite of it being reissued, Hong Kong issues some condition like

A. Only innovative companies are allowed to issue such shares

B. Market cap of the company should be at least HKD 10 bn and at least revenue of at least HKD 1 billion of revenue if expected market cap falls below HKD 40 bn

These are the safeguards Hong Kong has taken.