Sun Hung Kai Properties Ltd. Chairwoman Kwong Siu-hing reorganized the family trust that controls the world’s biggest developer by market value to remove elder son Walter Kwok as a beneficiary following a two-year feud, according to a person with knowledge of the matter.
A third of the family’s trust, which holds about 42 percent of the company, “is held for the benefit of Walter Kwok’s family,” Kwong said in an e-mailed press release issued by the company yesterday. That effectively omits Walter, who was stripped of the company chairmanship in 2008, as a beneficiary of the trust, the person said, declining to be identified as the issue is private. The statement specifies that the remaining two-thirds are held by “Thomas Kwok and his family” and “Raymond Kwok and his family.”
Deputy chairmen Thomas and Raymond Kwok, sons of the developer’s late founder Kwok Tak Seng, took over running Sun Hung Kai, which has a market value of $44 billion, in May 2008 after ousting Walter from the chairmanship and replacing him with their mother. The family’s combined wealth of $17 billion ranks third on Forbes Magazine’s list of Hong Kong’s richest.
“I don’t think this will have much impact on the company’s operation nor its share price,” said Castor Pang, Hong Kong- based research director at Cinda International Holdings Ltd. “Any uncertainty over the control of the company was already gone when Walter Kwok was removed as chairman in 2008. This statement basically confirms that he won’t be involved in any way at all.”
Sun Hung Kai shares fell 2.4 percent to HK$132.50 at the 4 p.m. close of trading in Hong Kong. The city’s biggest developers declined after Financial Secretary John Tsang said he’s increasing land supply to ensure the housing market can grow in a more “healthy” way.
Brenda Wong, a spokeswoman for Sun Hung Kai, said Walter Kwok is still a non-executive director of the company. She declined to comment further. Thomas and Raymond Kwok were not available for interviews, Wong said. Walter Kwok couldn’t immediately be reached for comment.
Walter Kwok said in a separate statement that he and his family retain a one-third interest in the trust’s holding in Sun Hung Kai, with his brothers Thomas and Raymond owning the rest. He disputed that his mother has sole ownership of the Kwok family stake in the Hong Kong-based real estate developer.
The English-language Standard newspaper earlier reported that Walter had been ousted.
Walter, who became chairman in 1990 after his father’s death, lost a court battle with younger brothers Thomas and Raymond in May 2008 to block a vote on whether to oust him.
Walter said in a court filing at the time that his brothers tried to remove him because he was suffering from mental illness. Walter said he didn’t have any such disorder and was suing his siblings for libel.
Listed on the Hong Kong stock exchange in 1972, Sun Hung Kai benefitted from a three-decade surge in home prices to become the city’s biggest developer. Under Walter Kwok, the company’s value had ballooned 10-fold, while assets rose to HK$264.5 billion ($34 billion) as of Dec. 31, 2007.
Sun Hung Kai built and runs the 118-floor International Commerce Center, which at 484 meters (1588 feet) is Hong Kong’s tallest building. The developer also manages luxury apartment projects such as the Arch in West Kowloon and the Larvotto in the Island South district.
Walter took over after the death of his father, who co- founded the company with billionaire Lee Shau-kee, who now controls Henderson Land Development Co. and is the city’s second-richest man, and Fung King Hei in 1963. The city’s richest man is Li Ka-shing, chairman of Cheung Kong (Holdings) Ltd., Hong Kong’s second-biggest developer by value.
Walter Kwok was taken hostage in the late 1990s and then freed after an undisclosed sum was paid to Hong Kong gang boss Cheung Tze-keung, nicknamed “Big Spender.” The Kwok family never reported the crimes to Hong Kong police.
Cheung was sentenced to death by a Chinese court in November 1998 for his role in a string of kidnappings including that of Walter, the state-run Xinhua news agency reported at the time.
To contact the editor responsible for this story: Andreea Papuc at email@example.com