Wed, Mar 21, 2012 - Page 10 News List

HK anti-graft body arrests Sun Hung Kai executive

DEVIOUS DEVELOPMENTS?The scandal has hit Asia’s largest developer and, according to one report, involves a director who was active in assembling land in Ma Wan

Reuters, HONG KONG

The 484m tall International Commerce Centre, center, developed by Hong Kong’s largest property developer, Sun Hung Kai Properties, is seen in Hong Kong on Feb. 28.

Photo: Reuters

A senior executive at Sun Hung Kai Properties Ltd (新鴻基地產), Asia’s largest property developer by market value, has been arrested by Hong Kong’s anti-graft body over alleged bribery, in a rare case for a major property company in the city.

Thomas Chan Kui-yuen (陳鉅源), a Sun Hung Kai executive director responsible for project planning and land acquisitions, was arrested by Hong Kong’s Independent Commission Against Corruption in relation to allegations of bribery, the company said. It did not give more details of the alleged offense.

Sun Hung Kai is run by brothers and joint chairmen Thomas Kwok (郭炳江) and Raymond Kwok (郭炳聯). The Kwoks are Hong Kong’s second-richest family, according to Forbes magazine, with a net worth of US$18.3 billion as of this month.

The company has set up a special committee to handle the commission investigation, the developer said in a statement late on Monday.

The company said the arrest “has not affected and will not affect” its normal business and operations.

A spokesperson for Sun Hung Kai said yesterday that it had no further details to add. The commission declined to comment on an individual case.

One analyst, who did not want to be identified given the sensitive nature of the allegations, said there had not been a similar case at a major Hong Kong developer since the analyst started covering the sector 15 years ago.

The Standard newspaper reported that Chan was particularly active in assembling land in Ma Wan, where the company is marketing its multitower Park Island apartment project, and at The Vineyard, a luxury low-rise development in rural Yuen Long.

Another analyst said Chan was particularly active in buying farmland from villagers in Hong Kong’s New Territories.

The Hong Kong Economic Journal stated that the allegations stem from a land deal in 2003, citing sources with knowledge of the matter. It did not elaborate.

Some analysts said the company is very careful with its land acquisition strategy and willing to pay higher prices for plots that it can buy securely at arm’s length.

According to a Reuters database, Chan, 65, has worked at the company since 1973 and has been a director since 1987. Sun Hung Kai develops property in Hong Kong and China and holds a portfolio of office space including Hong Kong’s tallest building, the International Commerce Centre.

Though land in Hong Kong is ultimately leased from the government, developers often assemble projects in the New Territories by negotiating with villagers that hold the plots.

David Webb, a Hong Kong-based corporate-governance activist, called on the developer to be more forthcoming.

“If they know what the allegation is, they should say what it is,” Webb said. “I can’t recall any senior official of a Hong Kong developer being arrested.”

Share prices of Sun Hung Kai, which has a market value of about US$39 billion, dropped 2 percent to HK$113.50 (US$14.62), with the Hang Seng Index down 0.8 percent.

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