BL: Sun Hung Kai Chairman Walter Kwok Replaced by Mother (Update1)
By Kelvin Wong
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May 27 (Bloomberg) -- Sun Hung Kai Properties Ltd., Hong Kong's biggest developer, replaced Chairman Walter Kwok with his mother, seeking to end a family feud that has gripped the city.
``Walter has ceased to be the chairman and chief executive of the company and has been re-designated as a non-executive director'' today, the company said in a filing to Hong Kong's stock exchange. Kwong Siu-hing, 79, was appointed chairman, the company said. No chief executive officer was named.
Walter Kwok is battling with brothers Thomas and Raymond, whose combined wealth of $24 billion placed them second on Forbes Magazine's list of Hong Kong's richest. The court case has aired squabbles over the running of the family-controlled company, making headlines in the city's newspapers.
Sun Hung Kai, co-founded by the Kwoks' father Kwok Tak Sin, has dropped 7 percent on the Hong Kong stock exchange since Walter filed the injunction, wiping off more than $4 billion in market value.
``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 today's announcement. ``They were worried that if this keeps dragging on it will ultimately impact the company's business.''
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 chairmanship in 1990 the company's market value has ballooned and the company now employs more than 27,000 people, according to its Web site.
Walter Kwok, 57, 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.
He has been on leave for personal reasons since Feb. 18.
Sun Hung Kai shares rose 1.3 percent to HK$127.30 at the 12:30 p.m. trading break in Hong Kong, before Kwok's departure as chairman was announced.
To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net
Last Updated: May 27, 2008 02:15 EDT
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