JD.com has made provisions ahead of its New York Stock Exchange listing that will make it ‘virtually takeover proof’.
The Chinese internet giant is preparing to raise $1.5 billion in shares which will make it the biggest ever Chinese initial public offering in the US. That is expected to change when its larger rival Alibaba launches its IPO (initial public offering) later this year.
The listing document stipulates that the board of directors are unable to vote on any subject unless JD.com founder and chairman Richard Liu is present. Lawyers have told the Financial Times that the provisions are 'very unusual'.
The newspaper said the clause meant that Liu could block any decision 'by staying at home'. Further reading of the documents reveals that Liu would also be able to remain chairman of the business even if he were to find himself in jail.
The document says, even in the instance of 'confinement against his will,' Liu would be able to remain in control through his position as chairman and through his power of veto by absence.
The clauses are believed to be designed to protect the founder from potential political manipulation as well as from small shareholders.
Alibaba is also expected to arrive in New York with unusual voting rights. Indeed, it has struggled to agree terms with the Hing Kong securities exchange on that basis and so is expected to opt for the US when it launches its IPO where rules are less tight.
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