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Hong Kong Lawmakers Vote Down Inquiry Into Television Permits

Nov. 7 (Bloomberg) -- Hong Kong lawmakers voted down a motion to probe Chief Executive Leung Chun-ying’s rejection of a startup’s application for a free-to-air television permit, a move that sparked protests demanding an explanation.

The motion moved by lawmaker Charles Mok was declared unsuccessful by Jasper Tang, president of the Legislative Council. The proposed inquiry was to look into why the government gave permits to PCCW Ltd. and I-Cable Communications Ltd., both controlled by billionaires, while rejecting Hong Kong Television Network Ltd.

The motion’s defeat will relieve pressure on Leung, whose popularity fell as tens of thousands marched in protest last month against his decision. The outcry over the licenses, the first granted in almost four decades, highlights the demand for choice in a market dominated by Television Broadcasts Ltd. and concerns that Hong Kong’s policies lack accountability.

“We respect the different views in an open society, the Executive Council considered the various submissions before making the present decision,” Gregory So, secretary for commerce and economic development, said during the debate.

Leung has struggled to gain broad public support since taking office in July last year, when he defeated front-runner Henry Tang, who had the support of tycoons including Asia’s richest man Li Ka-shing. Opposition lawmakers have since sought to pass votes of no confidence against Leung for his missteps.

The city said on Nov. 5 that a consultancy report showed Hong Kong’s free-to-air television market is unable to support five operators. Applicants were assessed based on their financial soundness, investment plans, and technical and program content, it said.

Shares of Hong Kong Television fell 2.5 percent to close at HK$2.38 today, taking its decline since its application was rejected to 22.5 percent.

Advertisers spent an estimated HK$13 billion ($1.7 billion) in Hong Kong last year, with television accounting for about a third of that, Bank of America Corp.’s Merrill Lynch unit said in a February report, citing Magna Global.

To contact the reporter on this story: Simon Lee in Hong Kong at slee936@bloomberg.net

To contact the editor responsible for this story: Hwee Ann Tan at hatan@bloomberg.net

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