Hong Kong Speculates Family Feud Triggered New Arrests at Country’s Biggest Development Company

April 04, 2012

by Oriah

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It’s the sort of scenario you might have expected in The Godfather, but hardly in Hong Kong, a metropolis of seven million souls that pampers its real estate tycoons and claims to be one of the most transparent governments in Asia.

But that image has been bruised. A family feud at one of Asia’s richest households, dating from 2008, is rumored to be behind several arrests over the last 10 days on bribery charges.

Arrested were:

The brothers, Raymond, 58 and Thomas Kwok, 59, joint chairmen of Sun Hung Kai Properties, one of the biggest commercial estate developers in Asia, and two of the richest individuals in Hong Kong. The Kwoks continue to stay on at the company as joint chairmen and managing directors while the investigation continues.

Sun Hung Kai executive director Thomas Chan and a company staffer for 25 years. World Property Channel reported Chan’s arrest March 22.

Rafael Hui, the former chief secretary of the public service, the second-highest position in the local government. After his arrest, Hui resigned as an independent director of AIA, the Asian arm of New York City-based American International Group.

Two so-far unidentified senior officials of a company listed on the Hong Kong Stock Exchange.

Coming also at about the same time of the arrest announcements was a public apology from the city’s top official, Donald Tsang for indulging in what appeared to be conflict of interest involvements. He acknowledged that he was an invited guest at a Macau casino banquet and took trips on friends’ yachts and private jets.

No one yet is speculating how and if the arrests and the apology are related. Government and company officials say they will comment after the initial investigation is completed.

What is known, however, is that the ouster of a third Kwok brother, Walter, 60, as chairman of Sun Kung Kai in 2008 may have triggered the corruption allegations against the two other Kwoks last week. Details of the family dispute so far have not been disclosed.

When Walter was eased out, his mother Kwong Siu-hing, whose late husband founded the company in 1972, acted as chairwoman for a short period.

The arrests were related to an investigation into violations of anti-bribery laws, the company said in a regulatory filing to the Hong Kong stock exchange.

The company said the commission issued a search warrant for its offices and it had ”been required to provide certain information with regard to the allegations”.

The Kwok brothers control a family fortune worth $ 18.3 billion as estimated by Forbes magazine. Forbes in March ranked them No. 27 on its list of the world’s billionaires.

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