Complete Property Market Updates of Singapore

June 11, 2008

Kwok family woes now tabloid fodder

Filed under: Developer News,General,Hong Kong — Propertymarketupdates @ 4:03 am

A FAMILY feud at Sun Hung Kai Properties, one of Hong Kong’s biggest developers, is shaping up to become a feisty legal battle for boardroom control.

The woes of the Kwok family have taken a dramatic twist after the chairman of Sun Hung Kai Properties, who took leave of absence in February, filed a writ against the company and his brothers.

At the time, Sun Hung Kai Properties said Walter Kwok was taking leave of absence due to ongoing personal and business overseas trips and planned to resume his duties.

Eager to return, Walter Kwok Ping-sheung has secured an injunction preventing a board vote that would see him ousted altogether, challenging an attempt by his two brothers to gain control of the company.

It is believed that cracks first began showing in the family when a friendship between Mr Kwok and a woman became the source of discontent in the family ranks over her role in the company and the advice she was giving the elder sibling.

In the writ, Mr Kwok disputes claims by his brothers that he is medically unfit to return to the helm of the company. He also listed a number of disagreements over company management. The executive claims that measures he took to boost corporate governance at the company led to discord.

The elder Kwok detailed an agreement between himself, his mother and his siblings prior to his leave of absence which outlined the process by which he would resume his role at the company.

He claims that an attempt by his brothers to permanently remove him is contrary to this agreement. As part of the deal, he was expected to produce two medical reports showing he was fit to return to work.

The ongoing saga and the prospect of the personal lives of the Kwok family being aired in public have put an otherwise modest family on the front page of every tabloid in the city. The family is well known for its conservative public presence and values, as well as its good standing in the community.

The family manages to stay relatively low key in a city where tycoons are treated like movie stars.

Walter Kwok took over as Sun Hung Kai group chairman in November 1990 following the death of his father, Kwok Tak-seng.

Today, the Kwok brothers are third on Forbes’ list of the richest people in Greater China, with an estimated net worth of US$14 billion.

Walter Kwok remains an executive director on a number of other boards of listed companies, as well as a standing committee member of the National Committee of the Chinese People’s Political Consultative Conference.

However the incident has become fodder for the press, withboth sides speaking publicly about their actions. During the weekend, the press followed family members to a number of engagements in which they spoke of acting for the good of the company.

The English-language Standard quoted rival sibling Thomas Kwok as saying that the decision to attempt to oust Walter Kwok was beneficial to both the company and its shareholders.

He dubbed it a ‘painful decision to make’.

The newspaper cited sources as saying that the brothers disagreed with a number of their sibling’s management decisions, some of which were made without consulting them.

It had previously been reported that the brothers were unhappy that although the daily operations are mainly overseen by the younger siblings, Walter Kwok had been taking an aggressive stance on business matters recently.

The female friend of Walter Kwok had moreover never been employed by the company, but started to show ambitions in certain parts of Sun Hung Kai’s business.

According to sources, this involved a desire to be put in charge of the company’s China operations.

The tycoon was reportedly one of several billionaires kidnapped by notorious gangster Cheung Tze-keung, otherwise known as ‘Big Spender’, in 1997. These reports have never been confirmed by the family.

Source : Business Times – 20 May 2008

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