U.S. Investor Pushes for Change at Chinese Tech Giant
- 7 years ago
U.S. Investor Pushes for Change at Chinese Tech Giant
Sina, one of the first Chinese tech companies to list its shares in New York, has
called Aristeia "self-serving" and naïve about how China’s internet sector works.
Jamie Allen said that Investors have been getting a bit fed up with companies like Baidu and JD.com not having general meetings,
Under those arrangements, shareholders have rights to the profits of a company,
but they do not control key assets — potentially leaving them exposed if the company runs into trouble or the Chinese government declares the structure illegal.
Based on their stock market values, Weibo is now more than twice as valuable as Sina — a gap
that Aristeia says points to lackluster management and poor corporate governance.
Proxy fights in general are not uncommon, but one between a Chinese company
and an American investor is the first of its kind, according to disclosures tracked by the data provider FactSet.
Aristeia Capital, a hedge fund based in Connecticut, is lobbying Sina shareholders to back its two candidates
for the company’s board in a bid to shake up Sina’s business and give shareholders fatter returns.
In turn, Aristeia, which manages $3 billion in investor money, has accused Sina of "failing to hold itself to the standards expected of U.S.-listed public
company boards." Foreign investors seem less than worried about any lack of control or lapses in corporate governance if the market is any indication.
Sina, one of the first Chinese tech companies to list its shares in New York, has
called Aristeia "self-serving" and naïve about how China’s internet sector works.
Jamie Allen said that Investors have been getting a bit fed up with companies like Baidu and JD.com not having general meetings,
Under those arrangements, shareholders have rights to the profits of a company,
but they do not control key assets — potentially leaving them exposed if the company runs into trouble or the Chinese government declares the structure illegal.
Based on their stock market values, Weibo is now more than twice as valuable as Sina — a gap
that Aristeia says points to lackluster management and poor corporate governance.
Proxy fights in general are not uncommon, but one between a Chinese company
and an American investor is the first of its kind, according to disclosures tracked by the data provider FactSet.
Aristeia Capital, a hedge fund based in Connecticut, is lobbying Sina shareholders to back its two candidates
for the company’s board in a bid to shake up Sina’s business and give shareholders fatter returns.
In turn, Aristeia, which manages $3 billion in investor money, has accused Sina of "failing to hold itself to the standards expected of U.S.-listed public
company boards." Foreign investors seem less than worried about any lack of control or lapses in corporate governance if the market is any indication.