FOR Charles Li, Alibaba was the one that got away. The head of the Hong Kong stock exchange (HKEX) courted the Chinese e-commerce giant when it sought a venue for its listing five years ago, but he could not push through rule changes wanted by Alibaba to keep control of the company in its leaders’ hands. It opted instead for an initial public offering (IPO) in New York. “Losing one or two listing candidates is not a big deal for Hong Kong,” he wrote at the time. “But losing a generation of companies from China’s new economy is.” Since then he has been determined to make the next big catch.

It is finally within his grasp. After a debate that has trundled on for several years HKEX is, in the coming weeks, poised to allow companies to issue shares with different voting rights. Known as dual-class shares, these give founders the ability to control their firms, even as minority owners. This should make Hong Kong the favoured destination for the next wave of Chinese tech firms to go public, from Xiaomi, a smartphone maker, to Ant Financial, Alibaba’s fintech spin-off. It should also bolster the city’s claim to being Asia’s leading financial centre.

But Mr Li’s success is controversial. Some of the biggest investors in Hong Kong warn that the changes will undermine corporate governance and harm most shareholders. They fear a “race to the bottom” around the region, as David Smith of Aberdeen Asset Management Asia puts it. Singapore, Hong Kong’s rival for financial pre-eminence in Asia, is on track to be the next market to allow dual-class shares. There are murmurings that some of the bigger exchanges in South-East Asia might follow.

The erosion of “one share, one vote”, long a cornerstone of equity markets, began in the 1980s on the New York Stock Exchange. The tech boom of the past decade accelerated the shift to dual-class shares, starting with Google’s IPO in 2004. Companies say unequal voting rights enable them to escape the short-termism of stockmarkets. Critics counter that conventional shareholding structures can serve long-term goals just as well, with less chance of mismanagement. Ironically, as Asia adopts dual-class shares, opposition is mounting in America. Last year FTSE Russell and S&P, two big index providers, barred companies from joining their stockmarket gauges if they list only non-voting shares.

The Hong Kong and Singapore exchanges have both pledged safeguards. HKEX has proposed that companies with dual-class shares must have an additional corporate-governance committee to ensure they are managed for the benefit of all shareholders. More boldly, Singapore might include a sunset clause, establishing a date at which shares with extra voting rights convert into ordinary shares. And both exchanges say they want to restrict dual-class shares to firms in innovative, emerging sectors.

But Jamie Allen of the Asian Corporate Governance Association predicts they will have a hard time holding the line against powerful companies in other sectors. “Once the genie is out of the bottle, it’s out,” he says. Over time, the fear is that if the standards of their stockmarkets slip, the reputation of Asia’s financial centres as generally clean, reliable places to do business will suffer, too.

In recent years the fortunes of the two exchanges have diverged. HKEX gained momentum from a flurry of initiatives, most notably a channel for cross-border trading with Chinese mainland stockmarkets. Singapore, meanwhile, faces stiffer competition from exchanges in the surrounding region. HKEX hopes dual-class shares will boost it further. For the Singapore exchange, they are a way to defend its turf. Concerns about shareholder rights are unlikely to stop either of them.