Grab seeks to double votes tied to Class B ‘super-voting’ shares; move could lift CEO Anthony Tan’s voting power to 74.9%

[SINGAPORE] Grab will hold an extraordinary general meeting (EGM) on Mar 24 on a special resolution to double the votes attached to its “super-voting” Class B shares.

The move could raise founder and group chief executive officer Anthony Tan’s voting power in the company to as high as 74.9 per cent, assuming there is no conversion of Class B shares into Class A ones, which carry one vote per share.

The special resolution proposes to increase the number of votes attached to Class B shares – held by Tan and other key figures at Grab – from 45 votes per share to 90 votes, based on a circular sent to shareholders on Friday (Mar 6) and seen by The Business Times.

Tan holds 59.1 per cent of Grab’s total voting power as at Jan 31, after taking into account proxy arrangements, according to the circular. At least two-thirds of valid votes will be required to pass the resolution.

If the resolution is approved, the company expects that other Class B shareholders – including co-founder Tan Hooi Ling and former president Ming Maa – will convert their Class B shares into Class A shares. Both are no longer with the company.

The proposed resolution ensures that even if all Class B shares not owned by CEO Tan and his affiliates are converted into Class A ones, Tan would still hold 69.4 per cent of the total voting power, Grab said in the circular.

Grab’s Class B shares grant its key executives greater voting power – a common practice among US tech companies that allows founders to retain control.

Board recommends “for” vote

Grab’s board has recommended that shareholders vote in favour of the resolution, citing that “it is in the best interests of the company to solidify its capital structure to preserve (its) focus on long-term growth”.

It also cited the need to “maintain a majority Singaporean control” over – Grab’s digital bank joint venture with Singtel – to meet the domestic regulatory requirement.

In its circular, Grab said that “maintaining (Anthony Tan’s) majority voting power is a prerequisite for satisfying the regulatory requirements of the Monetary Authority of Singapore”.

The company further noted that Tan Hooi Ling and Maa have “unrestricted rights” to convert their Class B shares to Class A ones at any time.

CEO Tan’s retention of voting power “provides a buffer against potential dilution from future corporate events, such as mergers and acquisitions or financings”, said Grab.

“We believe (his) majority voting power in Grab would preserve the company’s focus on long-term growth,” the company added.

The EGM will be held virtually at 11.45 am on Mar 24.