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Anthony Cheung, who served as the city’s transport and housing chief from 2012 to 2017, speaks at The Education University of Hong Kong on Thursday. Photo: Jonathan Wong

Hong Kong’s ex-transport chief Anthony Cheung says letting MTR Corp go public was a mistake because firm was ‘well catered for’ by government

  • Former official says city’s railway operator was given ‘sound economic considerations’ such as land concessions and building rights
  • MTR has been publicly listed since 2000, with the Hong Kong government being its majority shareholder, owning about 75 per cent of the firm
Hong Kong’s railway operator should never have been allowed to list on the stock market because of the preferential treatment it is given by its majority shareholder the government, former transport minister Anthony Cheung Bing-leung said on Thursday.

Cheung, the city’s transport and housing chief from 2012 to 2017, said the MTR Corporation had been given “sound economic considerations”, such as land concessions and the right to develop housing estates on top of metro stations.

“In hindsight, the decision to list the MTR Corp on the stock exchange was not a good one, because [it] is well – I wouldn’t use the word ‘protected’ – catered for by the government’s transport policies,” said Cheung at a seminar at The Education University of Hong Kong, where he is a professor in the Department of Asian and Policy Studies. The railway firm’s outgoing chairman, Frederick Ma Si-hang, is chairman of EdU.

Since last March, the MTR Corp’s governance had been called into question after a series of construction scandals related to the HK$97.1 billion (US$12.4 billion) Sha Tin-Central link.
The company is now set to be fined by the city for service disruption caused by a train crash on the Tsuen Wan line on Monday.

The railway giant has been publicly listed since 2000, with the Hong Kong government being its majority shareholder, owning about 75 per cent of the firm.

Cheung noted that the government makes sure public buses do not run the same routes as the MTR.

And while such arrangements would not have been an issue if the company was wholly government-owned, Cheung argued that it was problematic for small shareholders to benefit from government policies.

“You cannot write history backward,” Cheung said.

Last August, former railway boss Michael Tien Puk-sun, now a lawmaker, called for the government to repurchase all shares of the MTR Corp to strengthen the city’s oversight of railway projects.

Tien was the chairman of Kowloon-Canton Railway before it merged with MTR Corp in 2007.

On Thursday, Cheung said the government could not take direct control of the MTR Corp, despite owning more than three-quarters of the company.

“We have to fulfil our fiduciary duty, which is to make sure that the company’s long-term interests takes precedence,” he said.

“So I could not have said, ‘OK, the government wants fares to be reduced drastically’.”

Cheung acknowledged that all shareholders should have equal influence on a listed company, but he noted that reality is sometimes different.

Cheung said he used to joke to the MTR leadership: “Do you think Li Ka-shing had no influence on listed companies of Cheung Kong Holdings?”

Li, who retired last year at 89, was widely regarded as Hong Kong’s top businessman. He founded Cheung Kong Holdings, which became one of Hong Kong’s biggest conglomerates, in 1950.

This article appeared in the South China Morning Post print edition as: MTR Corp ‘should never have been allowed to list’
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