Sun Hung Kai Properties Ltd. said former Chairman Walter Kwok resigned as a non-executive director after the family reached an agreement on its interests in Hong Kong’s second-largest developer by market value.
Walter Kwok and his family received the same entitlement to shares in the company as his brothers and their families, said the statement. That restores Walter, the eldest son of late company founder Kwok Tak-seng, as a beneficiary of the family trust.
The announcement marks the end of a long-standing dispute among family members that was highlighted when Walter was ousted as head of the company in 2008 by his brothers, current co-chairmen Thomas and Raymond Kwok. The two brothers prepare to face trial in May for allegedly providing bribes to the city’s former No. 2 government official.
“We don’t see an immediate impact on shares or in terms of the operation of the company,” Sylvia Wong, a Hong Kong-based property analyst for UOB Kay Hian Ltd., said in a phone interview today. “It’s essentially a matter of family wealth distribution and Walter Kwok has not been involved in the company operation for a long time.”
Sun Hung Kai’s shares fell 0.1 percent to HK$96.15 at the close of trading in Hong Kong, paring a drop of as much as 2.1 percent. They have declined 26 percent in the past year, compared with a 7.2 percent drop in the benchmark Hang Seng Index.
Walter Kwok was removed in October 2010 as a beneficiary of the family trust that owns a 43 percent stake in the developer now valued at about $33 billion in a reorganization of the trust by their mother to effectively remove him following a two-year feud.
“The members of the Kwok family are pleased to announce that they have reached an amicable agreement regarding the treatment of the family’s interests,” the family said in the statement.
Walter Kwok has resigned from his post as a non-executive director to pursue opportunities outside of the company, today’s statement added.
“It’s positive in a sense that it removes one overhang that’s been there for the company in terms of the agreement between the family,” said Andrew Lawrence, a Hong Kong-based analyst at CIMB Group Holdings Bhd., who maintains a hold rating on the shares.
Thomas and Raymond Kwok took over running the company in May 2008 after ousting Walter from the chairmanship and replacing him with their mother Kwong Siu-hing.
Their net worth is $10.1 billion each, according to the Bloomberg Billionaires Index.
The brothers and two other men are charged with conspiring to provide payments, loans and free use of apartments totaling more than HK$35 million ($4.5 million) to Rafael Hui, according to court documents. They were first arrested in March in 2012. The brothers have denied any wrongdoing.
Adam and Edward Kwok, sons of Thomas and Raymond, were appointed alternate directors of the company following the arrest of their fathers.
The company in September set a lower sales target as measures by the Hong Kong government to curb an asset bubble slowed transactions. It’s seeking to sell HK$28 billion of homes in Hong Kong and China through June 2014, down from HK$32.9 billion a year earlier.
Barclays Plc in October joined UBS AG and Bank of America Corp. in forecasting a Hong Kong property slump, predicting home prices will fall at least 30 percent by the end of 2015 as income growth stalls and supply increases.