Hong Kong property giant SKHP to operate as normal following arrest of joint chairmen

Listed Hong Kong property developer Sun Hung Kai Properties Limited (SKHP) will continue to operate as normal following the arrest of joint chairmen and brothers Thomas and Raymond Kwok on bribery charges by Hong Kong’s anti-corruption watchdog.

According to Bloomberg, SKHP is the second-biggest property company in the world by value and was worth HK$290 billion ($36 billion) with assets of HK$442 billion ($55 billion) as of December 2011.

SKHP specialises in developing residential projects, offices and shopping centres and employs more than 35,000 people.

Forbes magazine lists the Kwok family as the third-richest in Hong Kong, with combined wealth of US$15.4 billion ($14.8 billion).

Thomas and Raymond took over the running of the company from another brother, Walter Kwok, in 2008 after ousting him in a boardroom battle.

Among the company’s most prized assets is the 108-storey International Commerce Centre in Kowloon (pictured above), the fourth-tallest building in the world, which it jointly developed and owns with the MTR Corporation Limited.

Shares in SKHP were suspended at 9.51am Hong Kong time yesterday (12.51 AEST) at the request of the company following the arrest of the two Kwok brothers by Hong Kong’s Independent Commission against Corruption (ICAC) in connection with an “investigation into suspected offences allegedly committed under the Prevention of Bribery Ordinance”.

SKHP has requested that the share resume trading at 9am Hong Kong time today.

Shares were down 15% in early trading from HK$111.10 to HK$94.

“The company wishes to clarify that the abovementioned arrests have not affected and will not affect the normal business and operations of the group,” says SKHP in a statement on its website.

“Subject to undertakings being provided to abstain from voting in respect of any matter relating to the allegations, the board has resolved that it is in the best interests of the company for Messrs Thomas and Raymond Kwok to continue to undertake and discharge their duties to the group including their duties as joint chairmen and managing directors of the company.

“Such resolution was unanimously passed by the 10 directors who participated in a board meeting of the company today.

“Messrs Thomas and Raymond Kwok did not participate in that board meeting.

“The executive committee continues to be responsible for the day-to-day management and operation of the company as usual.”

SKHP has re-constituted a special committee made up of three executives – Mike Wong Chik-wing, (executive director), Michael Wong Yick-kam (non-executive director) and Professor Richard Wong Yue-chim (independent non-executive director) to “handle all matters which may arise from and relate to the investigation”.

The special committee was originally set up on March 19 following the arrest of executive director and board member Thomas Chan Kui-yuen under suspicion of similar offences alleged against Thomas and Raymond Kwok.

Separately, SKHP’s current chief executive Donald Tsang is being investigated by ICAC for allegedly accepting trips on the yachts and planes of tycoons.

SHKP has been listed on the Hong Kong Stock Exchange since 1972.

Bloomberg lists US mall owner the Simon Property Group as the world’s biggest property company by market value worth US$44.3 billion ($41.6 billion).

Image courtesy of Sun Hung Kai Properties Limited