Blackout Period for Controlling Shareholder Applicable Rules
The Listing Rules impose certain restrictions on the disposal of shares by controlling shareholders following a company’s new listing. A “controlling shareholder” is defined as a person or group of persons who is/are: (i) entitled to exercise control over 30% or more of the voting power at general meetings of the company; or (ii) in a position to control the composition of the majority of its board of directors (Main Board Listing Rules 1.01 and 19A.14/GEM Listing Rules 1.01 and 25.10).
Under Main Board Listing Rule 10.07(1)(GEM Rule 13.16A(1)), a person or group of persons shown by the listing document issued at the time of a company’s listing application to be a controlling shareholder of the company, is prohibited from:
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disposing of his/her shares in the listed company in the period commencing on the date by reference to which disclosure of the shareholding of the controlling shareholder is made in the listing document and ending 6 months after the commencement of dealings in the company’s securities on the Hong Kong Stock Exchange (the Exchange); or
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disposing of his/her interest in the listed company if such disposal would result in him/her ceasing to be a controlling shareholder in the period of 6 months immediately following the expiry of the period referred to in paragraph (i) above.