This bug was fixed in the package util-linux - 2.16-1ubuntu4

---------------
util-linux (2.16-1ubuntu4) karmic; urgency=low

  * Removed access checks for hardware clock when called with --systz,
    since we may not have the rtc device at the point we run hwclock.
    I believe this is the cause of LP: #436076.
  * Set kernel timezone even when the hardware clock is in UTC.
    LP: #426886.

  * Don't step the system clock, or save the hardware clock on upgrades
    in case the time isn't quite correct.  LP: #430878.
  * Remove the hwclock.sh and hwclockfirst.sh scripts on upgrades, since
    these are now Upstart jobs.  LP: #434767.

 -- Scott James Remnant <sc...@ubuntu.com>   Thu, 24 Sep 2009 12:31:29
-0700

** Changed in: util-linux (Ubuntu Karmic)
       Status: In Progress => Fix Released

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system clock not adjusted when hardware clock in localtime
https://bugs.launchpad.net/bugs/436076
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