Eagerness to adopt dual-class shares is worrying

IT IS troubling to find that some companies here have either applied to amend their constitutions to allow them to switch to a dual-class share (DCS) structure, or have already done so, subject to whether the Singapore Exchange (SGX) eventually amends its Listing Rules to permit such structures ("Eight other companies found to have tweaked their charters to allow dual-class shares" BT, Jan 27).

Several questions spring immediately to mind. First, why the urgency to move when SGX has not even issued a consultation paper on the subject?

When approached, some firms replied that they were simply aligning their Articles of Association with the Companies Act since the latter was amended last year to make way for DCS. Fair enough. Yet the spirit of DCS as articulated by SGX's Listings Advisory Committee (LAC) is that such arrangements should be reserved only for companies that can show compelling reasons for wishing to adopt a structure that gives more voting power to a proportionately smaller number of presumably controlling owner-shareholders. What made the recent applicants think they qualify?