Key Issues Reflected by High Proportion of Opposition Votes from H-Share Shareholders of Chongqing Rural Commercial Bank on Charter Amendments

Chongqing Rural Commercial Bank’s H-share shareholders cast as high as 58.4917% of opposition votes on charter amendments, while the opposition proportion of A-share shareholders in the same period was only 1.6965%[1]. This phenomenon is not an isolated case, but reflects the common governance challenges faced by A+H listed companies and structural conflicts in cross-border capital markets.

From the voting data, the charter amendment proposal of Chongqing Rural Commercial Bank encountered strong opposition at the H-share class shareholders’ meeting. It is worth noting that such opposition vote phenomenon has formed a trend. Similar situations have occurred in many A+H listed companies such as China Energy Engineering, GF Securities, China Telecom, FGL Glass, Chunli Medical and other A+H listed companies[2]. These proposals mainly involve revising corporate governance systems in accordance with the new Company Law requirements, which are essentially routine compliance adjustments.

However, the same proposal received as high as 97.9933% of approval votes at the A-share shareholders’ meeting[1]. This completely different voting result deeply reflects the significant differences between investors from the two markets in terms of regulatory philosophy, corporate governance cognition and investment decision-making standards.

A person in charge of ESG matters at a listed company under a central enterprise clearly stated: ‘They (overseas investment institutions) attach great importance to the ESG content of listed companies, and casting opposition votes is a statement on corporate governance.’[2]

Some foreign institutions are dissatisfied with the content of listed companies’ ESG reports, believing that certain key indicators in the reports are not fully reflected. In this case, casting opposition votes becomes a way for them to express doubts about the company’s governance capabilities. This logic implies: If a company cannot demonstrate sufficient capabilities and transparency in its ESG report, shareholders express their disagreement with the status quo by casting opposition votes[2].

Zhong Hongwu, a professor at the Chinese Academy of Social Sciences, pointed out that ESG has upgraded from a ‘bonus item’ to an ‘entry ticket’. As an important carrier for enterprises to communicate with global capital, the quality of ESG reports directly affects whether enterprises can cross the trust threshold of cross-border capital[2]. This means that when A-share companies pursue international financing, they must establish an ESG disclosure system that meets the expectations of international investors.

This phenomenon reveals the core governance challenges faced by A+H listed companies:

1. Standard Divergence Dilemma
   : Domestic ESG systems started late but are developing rapidly. China is accelerating the establishment of localized ESG standards that conform to Chinese cultural values. Qiu Ciguan, a professor at Tsinghua University, pointed out that the standards under China’s ‘dual carbon’ goals are actually higher than those in Europe and the United States, but it still takes time for other countries to fully accept such standards[2].

2. Lack of Communication Mechanisms
   : As the aforementioned listed company person said, ‘We were also confused at first; these proposals are all ordinary.’ There is information asymmetry and communication barriers between company management and overseas investors, leading to normal compliance revisions being misread as signals of governance defects.

3. Increased Trust Threshold
   : Global institutional investors have increasingly strict requirements for ESG. Any revision that may be regarded as governance ‘regression’ or ‘ambiguity’ is likely to arouse vigilance.

As a large rural commercial bank, Chongqing Rural Commercial Bank has a relatively high proportion of international institutional investors in its H-share shareholder structure. These investors pay high attention to ESG core issues such as the bank’s risk management, related party transaction disclosure, and consumer rights protection. The content involved in the charter amendments, such as the establishment of the Party Committee and the adjustment of the Supervisory Board, may raise concerns about governance independence and transparency among international investors.

Although Chongqing Rural Commercial Bank finally passed the charter amendment proposal, the high proportion of opposition votes sent a negative signal to the market, which may affect its H-share valuation and subsequent financing capabilities.

Facing this structural challenge, listed companies need:

1. Strengthen ESG Disclosure Quality
   : Establish an ESG information disclosure system that aligns with international standards, and proactively respond to the concerns of overseas investors.

2. Optimize Investor Communication
   : Proactively communicate with major H-share shareholders before major governance revisions to explain the background, purpose, and impact of the revisions.

3. Promote Standard Mutual Recognition
   : Actively participate in the promotion of internationalization of China’s ESG standards to enhance understanding and mutual trust in cross-border capital markets.

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[1] Sina Finance - Chongqing Rural Commercial Bank revises charter; over half of H-share shareholders cast opposition votes (https://finance.sina.com.cn/money/bank/gsdt/2025-12-11/doc-inhamnye7899620.shtml)
[2] Securities Times - Opposition votes frequently appear at H-share class shareholders’ meetings; ESG issues become new concerns for dual-listed companies (https://www.stcn.com/article/detail/3557428.html)