RIGOL Technologies Co., Ltd. has published a draft Articles of Association that will take effect upon completion of its proposed H-share listing on the Hong Kong Stock Exchange, scheduled for July 2026. The document, which outlines the company’s corporate governance framework, key shareholder rights and financial policies, introduces several notable provisions:
1. Share Capital Structure • RIGOL, already listed on Shanghai’s STAR Market since April 2022, plans to issue an unspecified number of H shares in Hong Kong following approvals from the CSRC (25 February 2026 filing) and HKEX. • Post-offering, the company’s share capital will comprise 193.87 million A-shares plus the new H-shares, with exact H-share numbers to be finalised before listing.
2. Governance Framework • The board will consist of seven directors, including three independent directors and one employee representative. • An Audit Committee (three non-executive directors, majority independent) will replace a traditional Board of Supervisors, assuming responsibility for oversight of financial reporting, internal controls and auditor engagement. • Additional special committees—Strategy, Nomination, and Remuneration & Appraisal—are established to enhance board oversight. • Independent directors are limited to two consecutive three-year terms (maximum six years) and must meet stringent independence criteria.
3. Shareholder Rights and Protections • Shareholders may convene extraordinary general meetings if they collectively hold at least 10% of shares. • Related-party shareholders are barred from voting on transactions in which they have an interest; such matters require approval by a majority of disinterested shareholders. • The Articles detail robust mechanisms for derivative actions, enabling shareholders with ≥1% holdings for 180 consecutive days to sue directors or senior managers on the company’s behalf.
4. Profit Distribution Policy • Cash dividends are prioritised: if there is no major capital expenditure plan, not less than 10% of annual distributable profit must be paid out; over any three-year period, cumulative cash dividends must not fall below 30% of average distributable profit. • Interim dividends may be considered when liquidity permits. • Stock dividends can supplement cash payouts, subject to prudent capital considerations.
5. Capital Management • Share repurchases are allowed for six specific purposes, including employee stock ownership plans and convertible bond redemption. Shares repurchased for certain reasons must be cancelled or transferred within specified time frames, and total treasury shares cannot exceed 10% of issued capital. • External guarantees exceeding defined thresholds—such as those above 50% of net assets or provided to related parties—require shareholder approval.
6. Dissolution & Liquidation • The Articles clarify triggers for dissolution, including expiration of corporate term, shareholder resolution, merger, division, licence revocation or serious operational difficulties. • Directors become liquidators unless otherwise appointed, and the company must notify creditors within 10 days of initiating liquidation.
7. Effective Date The new Articles will replace the current version on the day RIGOL’s H shares commence trading in Hong Kong. Subsequent amendments will require shareholder approval and regulatory filings.
The publication of these Articles marks a key step in RIGOL’s cross-border capital-markets strategy, laying out corporate governance and shareholder safeguards aligned with both PRC regulations and Hong Kong Listing Rules.
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