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HenryTo
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 Posted: Thu Mar 29, 2012 11:58 pm Post subject: |
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Biggest corruption scandal in Hong Kong in decades.
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Sun Hung Kai dives as Kwok brothers arrested for graft
HONG KONG (Reuters) - More than $5 billion was wiped off the market value of Sun Hung Kai Properties (HKG:16), Asia's largest real estate developer, on Friday, hours after the company's billionaire owners were arrested on suspicion of corruption.
Hong Kong's Independent Commission Against Corruption (ICAC) arrested Raymond and Thomas Kwok in the biggest investigation since the agency was launched in 1974 to root out what was seen as widespread corruption in the government and police.
The Kwoks own $18.3 billion, the second-biggest family fortune in Hong Kong after Asia's richest man, Li Ka-shing, founder of rival developer Cheung Kong (Holdings) (HKG:1), according to Forbes magazine.
Shares in Sun Hung Kai slumped more than 15 percent when they resumed trading on Friday. The company owns some of the former British colony's largest properties, including its tallest, the International Commerce Centre that houses Morgan Stanley, Deutsche Bank and the Ritz Carlton.
The arrests in the city's biggest scandal in decades come just days after Hong Kong elected Beijing-loyalist Leung Chun-ying as its next leader, and as soaring property prices, among the most expensive in the world, have stirred public discontent.
Rafael Hui, a former No. 2 official in the government, was also arrested, according to media reports. Hui resigned as an independent director of insurer AIA Group (1299.HK) (AIG.N) late on Thursday.
Sun Hung Kai said the Kwoks would continue with their duties as chairmen and managing directors and normal business operations would not be affected.
FAMILY FEUD
The Kwok family had a public feud in 2008 that ended with elder brother Walter being ousted as chairman. Thomas and Raymond, backed by their mother, claimed Walter was mentally unfit to run the business, claims Walter has denied.
In a writ filed in Hong Kong in 2008 as part of his bid to avoid his ouster, Walter said his brothers repeatedly disagreed with his attempts to improve management at the company. He also said he tried to investigate the sale of a parcel of land in Hong Kong's New Territories at more than the asking price.
He also said he tried to investigate why construction contracts awarded by Sun Hung Kai Properties went to a select number of contractors.
Sun Hung Kai has since been run by Thomas and Raymond. Walter was not arrested as part of the ICAC investigation.
David Webb, a shareholder activist, said "It's notable that Walter Kwok has not been arrested, and one can only speculate as to whether he was the one who filed the complaint with the ICAC."
A property investor, who did not want to be identified as he knows the Kwok family, said: "This is possibly a case of a brother scorned is a dangerous thing."
The ICAC announced on its website that those arrested, whom it did not identify, were "alleged to have committed offences under the Prevention of Bribery Ordinance and misconduct in public office".
Gary Plowman, a former government prosecutor, said he had been to the ICAC and was representing one of the arrested parties, whom he declined to identify. "Nobody has been charged," he said.
LUXURY APARTMENTS
Steve Vickers, former commander of the police Criminal Intelligence Bureau and now CEO of a risk and security consulting company, said the timing of the case was interesting, in the context of popular sentiment against property developers and rising house prices.
"These cases are notoriously difficult to prosecute," he said. "It will be interesting to see whether charges emerge or not."
Over the past four decades, Sun Hung Kai, listed in 1972, has built some of Hong Kong's most expensive property, from luxury hilltop apartment blocks and harbor-front skyscrapers to landmark office buildings. Net profit has soared to HK$48 billion ($6.18 billion) in the year to last June from $10.4 billion two years earlier.
The company said 10 days ago that Thomas Chan Kui-yuen, a board member and the executive responsible for project planning and land acquisitions, had been arrested for suspected bribery.
Cable TV footage late on Thursday showed Raymond Kwok entering the ICAC premises in a limousine, flanked by two unidentified men. The station also showed images of a lawyer for Thomas Kwok going into ICAC headquarters.
Shares in Sun Hung Kai subsidiaries - mobile phone company SmarTone Telecommunications (HKG:315) and data-centre operator SUNeVision Holdings (HKG:8008.HK - News) - fell 3.4 percent and 2.7 percent early on Friday.
Sun Hung Kai bond prices also fell on Friday as investor concern grew over the company's immediate outlook. One Hong Kong based trader said there was no panic.
One analyst, who did not want to be identified given the sensitive nature of the issue, said any involvement of Hui, chief secretary from 2005-2007, suggests the case dates back many years. "It has to be a very old project," the analyst said. ($1 = 7.7643 Hong Kong dollars) |
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rffrydr
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rffrydr
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| Posted: Thu Sep 30, 2010 9:04 am Post subject: |
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All this....without leverage:
Hong Kong property
Published: September 30 2010 15:03 | Last updated: September 30 2010 15:44
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Where Western cities have chuggers, Hong Kong has pruggers. Pedestrians are assailed by first-jobbers seeking subscribers not to charities but to properties: a very visible symptom of one of the most super-heated property markets in the world.
The city has never minded a bit of asset price inflation, especially when the trade sector is weak. Since the economy bottomed in the second quarter of 2003, gross domestic product per capita has increased by 43 per cent, while property has shot up 113 per cent. But the gains since December 2008 are something else. The benchmark residential property index is up by 46 per cent – the steepest trajectory since the mega-bubble of 1997. |
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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rffrydr
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