Following is the speech by the Secretary for the Treasury, Miss Denise Yue, at LegCo Financial Affairs Panel on MTR Privatisation Share Offer today (November 6):
Chairman and Members of the Panel,
Thank you for the opportunity to provide this Panel with information on the process of coordinating the MTR Share Offer (the IPO) and listing.
Government appointed three companies in April as Joint Global Co-ordinators (JGCs) of the IPO and listing on the Stock Exchange of Hong Kong. The responsiblities of the JGCs included strategies, valuation, marketing, documentation and other listing related matters. The JGCs also appointed various professional bodies to assist themselves in bringing the project forward.
At the same time, another company was appointed as Government's Financial Adviser for the project to provide independent and professional advice to Government on all aspects of the IPO and the listing process to ensure public interest is adequately served.
Within Government, Finance Bureau was responsible for coordinating the IPO. Various bureaux/departments also participated and provided support. They include Transport Bureau, Department of Justice, Information Services Department, Official Languages Agency and Government Printer.
Of course, MTR Corporation Limited (MTRCL) fully participated and assisted in all aspects of the IPO and listing.
The Share Registrar
In an IPO, the share registrar is usually selected and appointed by the to-be-listed company because the share registrar is responsible not only for processing the application of shares during the IPO but to maintain and manage the company's register of shareholders thereafter on a continual basis. MTRCL appointed Central Registration Hong Kong Limited as share registrar for its listing. During the appointment process, MTRCL has taken into account various factors, such as Central Registration's business track record, the market share of share registrars in Hong Kong, the company's capacity to handle a potentially record-breaking number of share applications and that one of the two shareholders of Central Registration owns the largest share registrar in the world.
The responsibilities of Central Registration included collecting and processing all share application forms, calculating share allocations to applicants, printing and mailing share certificates, processing and sending refund cheques, etc. In an early stage of negotiation of the Share Registrar's Agreement, MTRCL had already requested for the capacity to process up to 650,000 applications during the period between the close of applications and the allocation of share certificates. Central Registration explicitly indicated that it had no problem dealing with this capacity requirement.
Government is also a party to the Share Registrar's Agreement entered into between Central and MTRCL due to the need to track and issue Loyalty Bonus Shares to eligible investors and to track and grant shares to eligible MTRCL employees.
All the parties mentioned above played important roles in the MTR Share Offer and listing process. They performed their own functions and worked hard to ensure a smooth IPO process. Of course the unfortunate incident of duplicate share certificates had caused confusion and inconvenience among certain local investors. To this Central has sincerely and without reserve apologised to Hong Kong investors, the SAR Government, and MTRCL etc. The Securities and Futures Commission will also conduct reviews and, in consultation with Financial Services Bureau, consider introducing improvement measures to avoid the recurrence of a similar incident in future.
Overall, the MTR IPO can be said to have been successful. It has also set various records, including the largest number of applicants, the most applicants allocated shares, and the first time to utilise Internet eIPO. In the years to come, further improvements in efficiency, productivity and flexibility of this listed railway company will be witnessed by the 600,000 investors. Thank you.
End/Monday, November 6, 2000