HK property giant ousts chairman in family feud
Posted on May-28-2008· by china investor
HONG KONG, May 27 (Xinhua) — Hong Kong’s largest residential developer Sun Hung Kai Properties voted its Chairman and Chief Executive Walter Kwok out of office on Tuesday in the latest episode of a legal feud involving members of the Kwok family.
The company, founded and controlled by the Kwok family ever since, announced in a statement with immediate effect that Walter Kwok will cease being chairman and chief executive officer, and serve instead as a non-executive director.
Kwong Siu-hing, Kwok’s 79-year-old mother, will serve as company chairwoman until the annual meeting of shareholders, which is expected in December. His younger brothers, Thomas and Raymond, will take over his duties as chief executive.
Walter Kwok, 57, has been running SHK Properties together with his brothers since their father Kwok Tak-seng died in 1990. The billionaire Kwok brothers managed to develop the company into Hong Kong’s largest residential developer.
SHK Properties issued a statement in mid-February, announcing that Walter Kwok will be on leave for months, during which his brothers will take over his duties. The news led to speculations and a fall in the share price of the company.
The board of SHK Properties met to discuss whether Kwok should cease being chairman and chief executive on Tuesday, one day after the Court of Appeal dismissed Kwok’s application for an injunction barring the board from convening on Tuesday.
Kwok had managed to apply for a temporary injunction before thelaw suit.
Walter Kwok’s lawyer, senior counsel Ronny Tong, told the court that Kwok’s younger brothers wanted to remove him from office for “improper motives”, namely on the ground that he was mentally unfit for the job. But the Court of Appeal rejected the argument, saying that the court could not dictate to the board who they should choose.
The company’s board said on Tuesday it made the decision in the best interests of the company and its shareholders and that the existing policies and direction of the company and shareholders will remain unchanged.
”The company will continue to follow the principle of collective leadership and will further strengthen its corporate governance, while striving for the best returns to the shareholders,” the developer said in a statement.
Walter Kwok issued a statement Tuesday expressing his regret for the decision and denying all allegations made against him by “certain directors” on the board. He pledged to monitor the company’s operations in his capacity as non-executive director.
Share price of company rebounded 0.88 percent to close at 126.8HK dollars (16.26 U.S. dollars), after it lost an accumulated 6.75percent over the past month.
Some said the family feud could have a negative impact on the image of the family-controlled developer while others saw a bright side in that it might prompt the company to review its governance and add elements of western management.
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