Sun Hung Kai Properties Ltd. Co-Chairman Raymond Kwok denied any wrongdoing and his brother Thomas said it was business as usual five days after Hong Kong’s anti-graft regulator detained the pair as part of a bribery investigation.
“I can’t comment on the probe but I can definitely say that I haven’t done anything wrong and I believe Thomas hasn’t done anything wrong either,” Raymond Kwok said at a press conference in the city yesterday. “I expect this investigation to prove my innocence.”
The comments were the first by the Kwoks since they were arrested by the Independent Commission Against Corruption on March 29. The stock climbed 2 percent yesterday ahead of the event, the first advance in five days, after falling 15 percent in the previous two trading sessions, the biggest two-day plunge in 14 years. The stock market is closed today for a holiday.
Facing a packed press conference, the pair declined to take questions, saying only that development plans and projects won’t be affected by the investigation.
“Don’t worry, it’s business as usual here at Sun Hung Kai,” Thomas Kwok said. “No one in Sun Hung Kai is going to slow down a bit, neither in Hong Kong nor in mainland China.”
The arrests marked one of the highest-level investigations in the corruption commission’s 38-year history and came after a Hong Kong leadership election on March 25 in which close ties between government and business emerged as a key campaign theme. Current Chief Executive Donald Tsang is being probed separately by the commission for accepting trips on the yachts and planes of tycoons.
The two Kwoks were detained in connection with a probe into offenses suspected to have been committed under the Prevention of Bribery Ordinance, the company said. Sun Hung Kai had also said the two men, who were released the same day of their arrest, will keep running the developer.
The press conference yesterday “is a positive gesture to give investors greater confidence, though the speech will not remove the overhang completely,” Alfred Lau, a Hong Kong-based analyst with BoCom International Holdings Co., said by phone.
The company’s U.S. shares advanced 0.3 percent yesterday, the first gain in five days.
Citigroup Inc. and Barclays Plc cut their recommendations on Sun Hung Kai’s stock and Goldman Sachs Group Inc. suspended its rating.
Lower Credit Outlook
Standard & Poor’s lowered the outlook on the developer’s A+ credit rating to negative, saying that the probe “may weaken the stability of its management and reputation of the company.” Moody’s Investors Service also lowered the company’s A1 outlook to negative from stable.
Sun Hung Kai has been run by Thomas Kwok, 60, and Raymond Kwok, 58, since the ouster as chairman in 2008 of their older brother Walter. Walter is still a non-executive director of the company. Their ages are cited in the company’s latest annual report.
Walter Kwok applied to the High Court in 2008 to prevent the board from removing him from office, alleging his brothers opposed his inquiries into impropriety in the way the company awarded construction contracts, and other corporate governance issues.
Thomas and Raymond have assets of $13.9 billion from a 42.9 percent stake in the company, according to data compiled by Bloomberg. They and Walter Kwok, who remains a non-executive director, are the only family members on Sun Hung Kai’s 16-member board of directors, according to the latest interim report.
Sun Hung Kai built and runs the 118-floor International Commerce Centre, which at 484 meters (1,588 feet) is Hong Kong’s tallest building, as well as the International Finance Centre complexes in Hong Kong and Shanghai.
The Kwoks “want to show they’re responsible and are aware of investor concerns, so they show their presence for that purpose,” said Ben Kwong, chief operating officer at KGI Asia Ltd., a Hong Kong-based brokerage. “It’s hard to say whether investors feel that will be enough. The investigation is still ongoing and it’s difficult to predict what will come out of it.”