Shareholder Activism in Asia and the Offshore Connection

Get ready to engage

Ian Mann, Asia Managing Partner and member of Harneys’ Litigation, Insolvency and Restructuring Group in Hong Kong
Originally published in the August | September 2020 issue

Shareholder activists acquire shares in listed companies to effect change by removing directors, lobbying for policy decisions, influencing the disposal or restructuring of assets, demanding dividend payments and more. Shareholder activism is an attractive means of launching a campaign compared to a more costly and difficult process of a full takeover. The battle is often publicly fought by proxy war at an EGM or in the media. Less commonly, but growing in popularity, the battle will take place behind closed doors via private negotiations and settlements. As a last resort the battle is taken to the courts, often the offshore courts of the British Virgin Islands and the Cayman Islands, where the majority of companies listed on the Hong Kong Stock Exchange are incorporated. 

The past few years saw remarkable growth in shareholder activism in contradistinction to the popularity of passive index tracker funds. Since the global financial crisis in 2008 activist investing has been on a sharp increase driven by increased shareholder engagement. 

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