Sun Hung Kai Properties: Walter Kwok Arrested In Bribery Probe
First Published Friday, 4th May 2012 09:08 am - © 2012 Dow Jones
-- Former chairman of Sun Hung Kai Walter Kwok arrested in bribery probe by anti-graft agency
-- Company says Kwok's arrest won't affect operations
(Adds background on investigation and arrests, updates company share price and background on company history)
By Polly Hui and Chester Yung
Of Dow Jones NEWSWIRES
HONG KONG -(Dow Jones)- Sun Hung Kai Properties Ltd. (0016.HK), one of the world's largest real-estate developers, said Friday that former chairman Walter Kwok, who is also the eldest son of its founding family, has been arrested by the city's anti-graft body in connection with a high-profile bribery probe.
The latest arrest came after Kwok's younger brothers Thomas and Raymond were arrested in March in the same investigation by the Independent Commission Against Corruption on suspicion of bribery.
The two younger brothers are joint chairmen and executive directors of Sun Hung Kai, Hong Kong's largest property company by market capitalization with a stock-market value of about HK$250 billion ($32 billion).
The anti-graft agency in March arrested in connection with the same investigation the city's former No. 2 official Rafael Hui. Long-serving Sun Hung Kai executive director Thomas Chan was also arrested in March.
Hui was Hong Kong's chief secretary from 2005 to 2007. He had worked in the government before that but left to serve as a consultant and a director for one of Sun Hung Kai's listed units.
Walter Kwok, a non-executive director of the company, declined to comment on Friday. But he did say through his spokeswoman Wednesday that he wasn't involved in Sun Hung Kai's recruitment of Hui and didn't know what Hui did at the group.
"Hui worked for my two brothers and he was not a consultant to me or my mother," Walter Kwok told Dow Jones Newswires Wednesday through his spokeswoman.
Sun Hung Kai said in a statement Friday that Walter Kwok was arrested by the ICAC on Thursday night and released on bail, adding that the arrest doesn't affect business. The company declined to comment further.
The ICAC revealed Friday without elaborating that it had arrested on Thursday a senior member of a listed company. A source familiar with the situation said the person was Walter Kwok.
No one arrested to date in the case has been charged.
Shares in Sun Hung Kai fell 1.8% to HK$92.60 Friday after trading was suspended Friday morning pending the Walter Kwok arrest announcement. The stock has dropped more than 16% since Thomas and Raymond Kwok's arrests in March.
Raymond Kwok has said earlier he is innocent of wrongdoing and believes his brother Thomas is, too.
The brothers preside over a real-estate empire with properties stretching across southern China, Shanghai and Beijing. Founded in 1963 by its late patriarch Kwok Tak-seng, Sun Hung Kai is one of Hong Kong's most successful companies.
When the elder Kwok died in 1990 he left Sun Hung Kai to his three sons, with Walter at the helm.
Under their stewardship Sun Hung Kai developed into one of Hong Kong's most well-respected enterprises, known for its quiet professionalism and robust growth.
But the relationship between the brothers unraveled in 2008 when the married Walter had a relationship with a female "confidante," according to another Sun Hung Kai director, Lee Shau-kee.
The feud erupted in court in 2008 after which Walter was ousted by the board as its chairman. The two younger siblings and their octogenarian mother then took the reins.
-By Polly Hui, Dow Jones Newswires; 852-2802-7002; email@example.com