HONG KONG: Thomas and Raymond Kwok, the billionaire co-chairmen of Sun Hung Kai Properties, and Rafael Hui, Hong Kong’s former No 2 official, were charged today in a bribery investigation surrounding Asia’s largest developer.
The Sun Hung Kai probe, Hong Kong’s biggest corruption case since its anti-graft agency was formed nearly 40 years ago, involves one of Asia’s most powerful families and one of Hong Kong’s most significant conglomerates.
The charges come amid other major investigations of government officials and a rocky political transition that has set off waves of protests from citizens angry about a host of issues including cronyism and cozy ties between government officials and the city’s tycoons.
Two others have also been charged in the case, which alleges offenses linked to bribery and misconduct in public office. They include Thomas Chan, the Sun Hung Kai board member in charge of land purchases, and Francis Kwan, a former banker.
Kwan is a friend of Hui’s, sources have told Reuters, and investigators have been looking into payments between Chan, Kwan and Hui. Kwan is a former chief operation officer of the Hong Kong Futures Exchange.
The five men were charged by Hong Kong’s anti-corruption agency, the Independent Commission Against Corruption. The ICAC said in a formal statement that the men will appear in a Hong Kong court today, where formal charges will be read.
The ICAC said in a statement the offences took place between 2000 and 2009. Hui alone faces charges related to misconduct in public office while Hui and Thomas Kwok face a joint charge of conspiracy to commit misconduct in public office. Hui and Raymond Kwok face a similar conspiracy charge.
Hui, Thomas Kwok, Chan and Kwan are also charged with one count of conspiracy to commit misconduct in public office, alleging they conspired together for Hui to receive a series of payments from Thomas Kwok, Chan and Kwan.
“I’m just shocked and horrified like everybody else,” Roger Nissim, the former manager of the company’s project planning department, said. “It’s the last company anybody would have expected to have this happen. The overriding feeling is that it’s sad that it’s come to this.”
Lawyers representing the five men could not immediately be reached for comment. Efforts to reach those charged were not successful.
The Kwoks were accompanied by their legal team today as they entered ICAC headquarters. The agency’s case has focused on alleged corruption and misconduct in public office, a Hong Kong ordinance and the core of the city’s anti-graft code.
The formal charges arrive just weeks after Simon Peh, the city’s former immigration chief, took the top post at the ICAC.
The Kwoks and others involved in the case faced a media scramble with hundreds of reporters crowding their vehicles in the sweltering summer heat and humidity.
Video and still cameras were pressed against limousine windshields and windows, attempting to identify which person was arriving. Their appearance back at the ICAC comes almost four months since the first arrests in the highest profile investigation in Hong Kong’s modern era.
Chan, the company’s board member in charge of land purchases and the first man arrested in the case, also appeared at the agency.
Walter Kwok, ousted as chairman of Sun Hung Kai Properties in 2008 and estranged from his brothers, was also arrested at the end of May. Walter, kidnapped and held for ransom in the late 1990s, lost a power struggle to his brothers, and had to cede control of the company’s top rank. Walter Kwok was not named in the ICAC charges today.
Friday’s charges came a day after the anti-graft agency arrested Hong Kong’s development secretary on suspicion of corruption. Mak Chai-kwong stepped down with immediate effect, dealing a fresh blow to the city’s new leader, Leung Chun-ying.
Sentinels of Hong Kong
With a market value of US$32 billion, Sun Hung Kai is the world’s second-largest property company. It and rival Cheung Kong (Holdings) dominate Hong Kong’s home-building and office-development industry.
The Kwoks, valued by Forbes magazine at US$18.3 billion before the arrests, rank locally in wealth only behind Asia’s richest man, Li Ka-shing, founder of rival developer Cheung Kong (Holdings).
Sun Hung Kai developed the city’s two tallest buildings, the International Finance Centre and the International Commerce Centre, which stand like sentinels on either side of Victoria Harbour. The conglomerate, founded by the Kwok brothers’ father, and overseen by the family matriarch, also has its hands in the city’s bus, fun and trash systems.
“The market has gradually built up more confidence that it has priced in this issue,” Alfred Lau, property analyst at Bocom International, said. “That is not good. This will remain an overhang for the company for the longer term, until the case is settled.”
Lau also said that the impact of the case could stretch beyond the company, as charges involving land grants “might bring more concern to the industry.”
The company has repeatedly said it has a contingency plan in place in case the co-chairman cannot continue with their duties, but has declined to say what that is.
“I can tell you definitely that I personally did not do anything wrong and I believe that Thomas Kwok has done nothing wrong,” Raymond Kwok told reporters in April as the pair faced the media at the company’s Wan Chai headquarters in their first public appearance since the arrests.
The family-run company is governed by a trust that controls 43 percent of the company’s shares, overseen by the brothers’ 83-year-old mother, who was rushed to a local hospital last month for an emergency yet to be identified. She has since left and has recovered, a company source told Reuters.
With revenue of HK$62.6 billion (US$8.1 billion) in the fiscal year ended in June 2011, the property arm makes half its money from building new apartments, with the rest from renting office and retail property. It pays US$1 million in tax to the Hong Kong government each year. Sun Hung Kai recently expanded the executive committee that oversees the company to 12 members, from seven.
Shares of the company, which are Asia’s most widely held property stock, fell 0.7 percent at the open, but were up 0.5% when trading was suspended. The company said it requested the suspension ahead of the release of potentially price sensitive information.
The shares have slumped since the March arrests.
Trading in SmarTone Telecommunications Holdings Ltd and SUNeVision Holdings Ltd, two units of Sun Hung Kai Properties, was suspended on Thursday, according to Hong Kong stock exchange data.