A4 Saturday, July 14, 2012 FOCUS Breaking with the old ways

With Thomas and having been charged by the ICAC, the family has been forced to give its third generation more control of , naming two youngsters as alternate directors Well-known

...... face in HK the board of a Hong Kong company, Peggy Sito and Sandy Li but she became the chairman and non-executive director of the city’s securities largest real-estate developer in May Once seen as being unprepared for 2008, partly as a result of the a family command of Hong Kong’s largest feud that led to the ousting of her son charged property developer, the third genera- as chairman and chief tion of the Kwok family has finally executive...... been entrusted with the task of con- The boardroom battle is without Peggy Sito trolling Sun Hung Kai Properties. precedent in Hong Kong’s recent [email protected] Sun Hung Kai Properties last corporate history in terms of dra- night announced that it had appoint- ma, intrigue and acrimony. ed the two sons of the billionaire co- In October 2010, Sun Francis Kwan Hung-sang, one of the chairmen – Ping- Hung Kai Properties issued five suspects to be charged by the In- kwong and Raymond Kwok Ping- an announcement, on be- dependent Commission Against luen – as alternate directors. half of Kwong, that excluded Corruption in the Sun Hung Kai As part of the reorganisation, Walter Kwok in a reorganisat- Properties probe, is a familiar figure Mike Wong Chik-wing and Victor Lui ion of the family trusts that in the city’s stock and futures broker- Ting, who have each served the hold in the empire. A third of age community. group for more than 30 years, have the shareholding of the trust is Kwan, 61, was yesterday charged also been promoted to deputy man- now held for the benefit of “Wal- by the anti-graft body over alleged of- aging directors. ter Kwok’s family”, rather than fences linked to bribery and miscon- “These changes will further Walter Kwok and his family. Walter’s duct in public office. strengthen our corporate gover- younger brothers, Thomas Kwok and “He is a close friend of ,” nance structure and will ensure that Raymond Kwok, are each beneficia- said a source familiar with the matter. the company continues to develop The matriarch of the company, ries of a third of the trust along with Kwan has been involved in bank- steadily,” Thomas Kwok said last Kwong Siu-hing (left); her son, their families. ing, investment and exchange opera- night. Raymond Kwok, leaving Eastern In December of last year, Kwong tions in Hong Kong for more than 30 The boardroom reorganisation Court in Sai Wan Ho yesterday. stepped down as the chairman and years and joined the Hong Kong Fu- came on the same day the two co- Photos: David Wong; Sam Tsang non-executive director. Thomas and tures Exchange in May 1995. Three chairmen were charged with bribery Raymond became joint chairmen. years later he was promoted to be- and misconduct by the Independent The fallout among the Kwok come chief operations officer of that Commission Against Corruption, the company’s business, for years,” said brothers – Thomas, Raymond and exchange, which in 2000 merged anti-graft agency. Their eldest broth- a source close to the family. Walter – has now been further com- with the Stock Exchange of Hong er, Walter Kwok Ping-sheung, was ar- “They are smart and hard work- plicated by the fact that all three have Kong, and together with Hong Kong rested early in May by the ICAC but ing,” the source said. “They have been arrested by the ICAC. In early Securities Clearing Company formed was not charged yesterday and was been learning for several years about May, two months after his younger Hong Kong Exchanges and Clearing. released on bail. how to run the company. brothers were arrested, Walter Kwok Kwan was head of the group risk The charges have raised concerns “Thomas and Raymond are not was detained in relation to the same management division at Hong Kong about succession planning at SHKP, going to let their sons take over the case. Exchanges and Clearing before leav- where members of a new generation company. They are still young. They In an interview with the South ing it on April 1, 2004, according to a –the three brothers have 10 children – need to be trained. China Morning Post in early May, spokesperson for the exchange. are now poised to take over, albeit “They will come back to the office Walter Kwok said that his mother was gradually. every day to keep the company run- seldom involved in the company’s Adam Kwok Kai-fai, 29, and ning smoothly.” business. Edward Kwok Ho-lai, 31, were ap- To strengthen investor confi- “She is just a housewife,” he said. pointed as alternate directors to dence, Raymond Kwok said the busi- “My mother has not been in- Thomas Kwok and Raymond Kwok ness strategy of SHKP remained un- volved in the company’s business. respectively. changed. Only when the three of us had argu- Adam is the eldest son of Thomas “We will continue to uphold and ments did she offer an opinion.” Kwok and Edward is a son of Ray- Thomas and strengthen our brand, relying on our In the interview, Walter Kwok also mond Kwok. quality buildings and service to win challenged his mother’s power to re- But the reorganisation did not Raymond are not the support of the market. Our busi- move him as a beneficiary of the fam- mention Walter Kwok’s two sons, ness decisions will continue to be ily trust that controls the Sun Hung Geoffrey and Jonathan. They are also going to let their guided by the interests of Hong Kai Properties empire. beneficiaries of the family trust that sons take over the Kong’s development, our company, But a source close to the company controls SHKP. shareholders and employees,” Ray- said that Kwong was greatly involved Geoffrey, 26, is studying for a mas- company. They are mond Kwok said. in Sun Hung Kai Properties’ business ter’s degree at Stanford University “There is a Chinese saying: sturdy after Kwok Tak-seng’s death. after working briefly for SHKP. Geof- still young grass is only revealed by strong Kenny Tang Sing-hing, general frey’s younger brother, Jonathan, is winds. Challenges will only make us manager of AMTD Financial Plan- A SOURCE CLOSE TO SHKP studying in New York, and his sister stronger and I will cope with this ning, said: “In the next few years, I be- works in Singapore. challenge with perseverance.” lieve the company’s business will Apart from Adam, Thomas Kwok Adam Kwok holds a bachelor’s de- Thomas Kwok said: “History tells continue to grow due to its quality has another son and a daughter who gree in management science and us that perseverance and faith can assets.” are still in secondary school. His eld- engineering from Stanford and a take us through the rough times. The company will run smoothly est daughter is married and no longer master’s degree from Harvard Busi- “With this faith, I am facing this provided the mother stays in the pic- works outside the home, a family as- ness School. He worked in an inter- challenge with no fear. ture, and the anti-corruption investi- Francis Kwan sociate said. national investment bank prior to He also said his religious beliefs gation result is not too serious, ac- A source said Raymond has an- joining the group in November 2008, had helped him. cording to Tang. other son, Christopher, who works and currently is a project manager “I am grateful that as a Christian, In a recent research report, Daiwa After leaving, Kwan ran a com- for an investment bank and also runs taking charge of key residential and my faith gives me hope, peace and Capital Markets said shares of Sun pany called USP Enterprise, which a restaurant, while his daughter commercial projects in Hong Kong joy. The Bible’s teachings act like a Hung Kai Properties might fall 20 per sells supplement products aimed at works for an American retailer. and the Pearl River Delta region. beacon, guiding me through the cent further in a worst-case scenario preventing drunkenness. “We hope the reorganisation of Edward Kwok is the son of Ray- darkness and anchoring each phase resulting from the anti-corruption Kwan served as an independent the board members will give inves- mond Kwok and holds a Bachelor of of my life.” investigation into the billionaire non-executive director of New Envi- tors a clear and transparent picture of Arts from Yale and a postgraduate di- Another senior executive said: Kwok brothers. ronmental Energy Holdings from how the company will move for- ploma in professional accountancy “Even if the two chairmen could not That worst-case scenario would June 15, 2006, to April 25, 2012. He ward,” said the source, who is close to from Chinese University. His profes- run the company, in a worst-case occur if new and more serious served as an independent non-exec- the company. sional qualifications include being a scenario, Kwong Siu-hing, the matri- charges were raised against the utive director of Tianjin Port Devel- According to the announcement, member of the Hong Kong Institute arch of the Kwok family, could still brothers by the Independent Com- opment Holdings from September 8, of Certified Public Accountants and look after things. mission Against Corruption, Daiwa 2005, to April 1, 2012. He obtained a the Institute of Chartered Accoun- “She is always our spiritual property analyst Jonas Kan wrote in a management development certifi- tants in England and Wales. leader.” report dated June 29. cate from the University of British He joined the group in January, Kwong, who has maintained a There could be a further sell-off in Columbia in Canada in 1989. 2010 and is now a sales and project low profile in her 79 years of life, is the stock if the pair were charged with The Hong Kong Economic Journal manager, responsible for feasibility now seen as a key person in control- offences more significant and serious reported in April that the ICAC had studies, marketing and planning of ling the fate of Sun Hung Kai Proper- than what had been discussed in the issued a notice demanding the secu- 27,000 new residential projects in Hong ties – which has more than 27,000 media, Daiwa said. rities account information of six The approximate number of Kong. Before joining SHKP, Edward employees. “The share price may test lower Hong Kong securities dealers. employees at Sun Hung Kai Kwok worked in a major internation- Born in the suburb of ground, but we would see support at Kwan and Thomas Chan Kui- Properties, the city’s largest al audit firm. Huadu, Kwong moved to Hong Kong about HK$74,” Kan said in the report. yuen, the Sun Hung Kai executive developer “Adam and Edward have been ro- in 1947. She married the founder of Shares in SHKP yesterday rose 0.052 director in charge of land purchases, tating among various departments, Sun Hung Kai Properties, Kwok Tak- per cent to HK$94.45 in the first 17 were two of the six names mentioned

such as planning, leasing, construc- seng. minutes, before it was suspended HenryIllustration: Wong in the list. Both were charged by the tion and infrastructure, to learn the The mother of six had never sat on from trading at 9.48 am. ICAC yesterday. Bumpy ride expected for SHKP shares

...... Chance and Hong Kong-based Boase pended from trading at 9.48 am yes- directors to resign until they are “They should step down now and “After Tony Chan’s case, this is go- charge more than HK$10,000 an Sandy Li, Paggie Leung, Peggy Sito Cohen & Collins. terday, pending the release of the found guilty.” come back when all the charges have ing to be another textbook case for all hour. and George Chen A third brother, Walter Kwok ICAC announcement. The shares But legislator Chim Pui-chung ar- been cleared,” he said. lawyers in Hong Kong to monitor and Although SHKP has repeatedly as- Ping-sheung, the eldest who was edged up 0.052 per cent to HK$95.45 gued that it would be better for the Retail investors have remained study,” said a partner at a local law sured its shareholders and clients Analysts expect short-term volatility forced out of the property developer before the halt in trading. firm’s reputation if the joint chair- upbeat about the stock, at least for firm who is not involved in the case, that it is business as usual, investors in Sun Hung Kai Properties’ stock in a bitter family feud, subsequently The company’s share price has men were suspended from their du- the time being. referring to the battle over the estate worry what will happen to the com- after its joint chairmen, Thomas was arrested and is out on bail. fallen 14 per cent since the arrests of ties for the moment. “Its share price has climbed back of late Chinachem chairwoman Nina pany, one of the largest listed prop- Kwok Ping-kwong and Raymond The case is one of the highest-lev- March 29, compared with a 3.1 per to HK$95.45, from about HK$87 last Wang Kung Yu-sum. erty developers, now the two Kwoks Kwok Ping-luen, begin a legal battle el corruption investigations in the cent decline in the Hang Seng Prop- month,” said 65-year-old Cheng In February, the Court of Appeal have been formally charged. that is expected to last several years. city’s history. erty Index. Sum, a retired housewife. “I’m confi- dismissed fung shui adviser Tony Some shareholders had already The billionaire brothers who run Legal experts said that, in theory, Trading in two subsidiaries of dent that it will later rebound back to Chan Chun-chuen’s attempt to over- been pressing the company to make the developer are digging in for a using separate lawyers could indicate SHKP – SmarTone Telecommunica- more than HK$110,” said the investor, turn a ruling that denied his claim to a Plan B for management control, in tough fight with the Independent the brothers are preparing for the tions Holdings, a mobile phone oper- who bought nearly 10,000 shares of Wang’s multibillion-dollar fortune. particular for day-to-day operations, Commission Against Corruption by event that they are put in an awkward ator, and Sunevision Holdings, an in- SHKP at an average price of around The case attracted a lot of attention as since the two Kwoks will now have to hiring three big law firms. position against each other in court. formation technology firm – were HK$65 per share. it dragged on for more than five years. spend a lot of their time dealing with People in finance and property “A sharp fall in the share price will also suspended yesterday, according News of the high-profile arrests Chan now faces a HK$150 million bill the lawsuit. circles thought the two brothers be unlikely. As some funds may be re- to the Hong Kong stock exchange. initially sank SHKP’s share price. It for legal fees for his failed lawsuit, in- “A case like this could go on for might share the same legal team in a stricted from investing in companies The growing uncertainties might has since stabilised but is still down cluding the court costs that were in- five years or even seven or eight joint defence, but they have gone with top management embroiled in send the shares as low as HK$86, about 14 per cent compared with be- curred by the winning side. years,” said an analyst at a major in- their separate ways and hired differ- legal disputes, it will be negative to Yuen said. fore news of the arrests broke. Local lawyers with major firms vestment bank who monitors the ent counsel. the company’s share performance in While critics suggested the Kwok The brothers’ arrests also created charge clients between HK$2,000 case closely for her clients. Raymond Kwok has hired British the short term,” said Eric Yuen Chi- brothers should step down, a lawyer a stir in legal circles, where big law- and HK$5,000 an hour, depending “People like the Kwok brothers firm Reed Smith Richards Butler. His fung, the head of research at Guoco who asked not to be named said: suits can mean paydays of tens or on the lawyer’s experience and qual- will appeal [if they lose] again and elder brother Thomas has retained Capital. “There is no legal requirement for Thomas Kwok arrives at ICAC even hundreds of millions of dollars ifications as well as the complexity of again and that, of course, means London-headquartered Clifford SHKP requested its shares be sus- listed company chairmen or board headquarters. Photo: Sam Tsang in legal fees. the case. Senior lawyers sometimes more money for their lawyers.”