The dearth of insurance that protects directors of special purpose acquisition companies from legal liability could hold back mergers and acquisitions and prove to be a setback for Hong Kong’s new listing regime, according to sponsors and insurance players, the South China Morning Post reports.
The lack of directors and officers liability insurance in Hong Kong has been cited as a risk factor by sponsors of SPACs.
Only a few insurers provide such coverage, and those that do charge a high premium, which could make it difficult for SPAC sponsors to fulfil their ultimate goal of delivering a return to investors through mergers with target companies, according to several SPAC applicants pursuing listings in Hong Kong. Read more.
