Sun Hung Kai Properties Ltd (新鴻基地產), Hong Kong's biggest developer, replaced chairman Walter Kwok (郭炳湘) with his mother, seeking to end a feud that has gripped the city and split its second-richest family.
“Walter has ceased to be the chairman and chief executive of the company and has been re-designated as a non-executive director,” the company said in a filing to Hong Kong’s stock exchange. Kwong Siu-hing (鄺肖卿), 79, was appointed chairman, the company said. No chief executive officer was named.
Sun Hung Kai rose in Hong Kong trading after the decision, extending its rebound from a slump that had erased more than US$4 billion of market value. Walter, who became chairman in 1990 after his father’s death, lost a court battle yesterday to prevent a vote on his ouster, with younger brothers Thomas Kwok (郭炳江) and Raymond Kwok (郭炳聯). Walter, 57, also is suing his siblings for libel.
“The next question is how the company manages to deal with long-term arrangements,” said Nicole Wong, a property analyst at CLSA Ltd in Hong Kong.
The dispute has aired in court squabbles over the company that built Hong Kong’s tallest skyscraper and is the foundation of the Kwok family’s combined wealth of US$24 billion, second on Forbes Magazine’s list of Hong Kong’s richest only to Li Ka-shing (李嘉誠).
“Investors were obviously concerned about who’s going to be in charge,” Wilson Hung, an analyst at Hong Kong-based brokerage Quam Ltd, said before the announcement. “They were worried that if this keeps dragging on it will ultimately impact the company’s business.”
Sun Hung Kai rose 2 percent to HK$128.20 (US$16.42), heading for the biggest two-day gain in three weeks, as of 2:42pm in Hong Kong.
Listed on the Hong Kong stock exchange in 1972, Sun Hung Kai rode a three-decade surge in home prices to become the city’s biggest developer. Since Walter Kwok took over, the company’s value has ballooned 10-fold and the company now employs more than 27,000 people, its Web site said.
Walter Kwok said in a court filing that his brothers tried to remove him because he was suffering from mental illness. He said he doesn’t have any such disorder.
Walter, who has been on leave for personal reasons since Feb. 18, filed an injunction on May 15 to block the board vote.
Last Wednesday, he sued his brothers for libel, saying they had dubbed him a “liar,” a person of “low integrity” who made “unwise” investment decisions.
They have denied all the allegations.
Hong Kong’s Court of Appeal yesterday upheld a High Court ruling on Friday that canceled a temporary injunction blocking the meeting.
“This court simply cannot dictate to the board who should be their chairman,” Justices Rogers and Le Pichon said in Hong Kong’s appeals court yesterday.