Sun Hung Kai Properties
Sun Hung Kai Properties is one of Hong Kong’s largest property groups, with revenue of HK$68.4 billion in the 2011-2012 financial year, and profit attributable to shareholders of HK$43.08 billion. The company has been shaken in recent years by disputes between family members, with chairman and chief executive Walter Kwok being forced to step down in a dispute with his brothers Thomas and Raymond. In March, the Independent Commission Against Corruption (ICAC) arrested senior officials as part of a corruption probe that also included former chief secretary Rafael Hui.
Third generation 'not ready' to run family firm
The arrest of all three Kwok brothers at the top of Sun Hung Kai Properties in a corruption investigation has deepened concern about succession at the firm.
Their children, the third generation of Kwoks, are not seen as being ready to take command of the listed developer, in which the family retains a controlling stake.
The Independent Commission Against Corruption arrested Walter Kwok Ping-sheung, the firm's ousted chairman and now a non-executive director, on Thursday, the company said yesterday.
The arrest came after the graft-busting agency arrested his two younger brothers, co-chairmen Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, on March 29 for alleged bribery, along with former chief secretary Rafael Hui Si-yan.
All those arrested are out on bail. None has been charged.
Among the brothers' 10 children, only two work for the company, people close to the family said.
Thomas Kwok's son Adam Kwok, 28, and Raymond Kwok's son Edward Kwok, 27, have been rotating among various departments, such as planning, leasing, construction and infrastructure, to learn the company's business.
'They have been learning for about a year or two how to run the company,' a family friend said.
'[Thomas and Raymond] are not going to let their sons take over the company. They are not qualified yet, and they will not add value to the board if they are appointed now.'
Walter Kwok's son Geoffrey Kwok, 26, is studying for a master's degree at Stanford University after working briefly for Sun Hung Kai Properties. Geoffrey's younger brother, Jonathan, is studying in New York, and his sister works in Singapore.
Thomas Kwok has another son and a daughter who are still in secondary school. His eldest daughter is married and no longer works outside the home, the family associates said.
They said Raymond has another son, Christopher, who works for an investment bank and also runs a restaurant, while his daughter works for an American retailer.
The company has many directors who have been there for three or four decades, and they could coach the third generation, the people close to the family said.
Eric Yuen Chi-fung, head of research at Guoco Capital, said: 'The company could hire an external professional manager or promote one internally if the Kwok brothers are unable to serve as chairmen. This is what the company should prepare for.'
Billy Mak Sui-choi, associate professor of finance and decision sciences at Baptist University, said the Kwok family, as controlling shareholders, has the right to appoint directors to the board so as to maintain its influence.
'If they appoint someone who is not capable of running the company, institutional and minority shareholders can vote against the appointment during the annual general meeting,' Mak said. 'To be fair, there are some successful cases of fathers passing the business to their sons when they are still young.'