MTRC - a One-Hit Wonder on TV

Hong Kong privatization benefits from regulatory double standards.

The Mass Transit Railway Corp.'s television advertisements have fuelled speculation among some corporate financiers that it sets a precedent for future Hong Kong initial public offerings to advertise as well but don't bet on the Securities and Futures Commission granting approvals. The Financial Services Bureau has determined that the government can promote the MTRC deal because it is not a listed company.

The possibility of advertising first arose last year with the launch of the Tracker Fund. The government actively promoted the deal not just by offering it at a discount, but with a heavy media campaign that included television commercials. Mark Shipman, a lawyer at Clifford Chance, which worked on the Tracker Fund...

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