SHKP hires new message maker
The Kwok brothers who run Hong Kong's Sun Hung Kai Properties, have quietly hired a crisis manager to help them navigate through one of the highest-level corruption probes in the history of the anti-graft agency, the Independent Commission Against Corruption.
Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, co-chairmen of SHKP, together with Rafael Hui Si-yan, a former Hong Kong chief secretary, were arrested in late March by the ICAC as a result of an investigation into allegations of bribery and misconduct in public office.
The three have not yet been charged and have been released on bail, though some investment bank analysts believe charges will be laid and the case moved to court in the next few months.
The negative publicity arising from the arrests dented SHKP's reputation and the immediate reaction of investors to the news was to dump the developer's shares on March 30, wiping 13 per cent off the developer's market capitalisation in a single trading session.
The shares closed at HK$89.25 yesterday, down 19.6 per cent since news of the probe broke. The benchmark Hang Seng Index has lost 3.5 per cent over the same period.
Now the Kwok brothers have engaged the Hong Kong office of global crisis management firm APCO Worldwide to help them manage the crisis of confidence created by their arrest and the ICAC probe, and repair SHKP's damaged reputation.
The move, which has not been announced, was interpreted in the market as a sign that the two men from one of the wealthiest families in Hong Kong are digging in for a long battle against the government investigation.
'Obviously if they believed it would be easy to be rid of all trouble and close the case within a few months, it would not have been necessary for them to hire a specialist firm like APCO,' said an analyst with a major investment bank who monitors the ongoing SHKP case closely for the bank's clients.
'To me it sounds like we should prepare ourselves to see a years-long battle between the Kwok brothers and ICAC,' she said.
The analyst declined to be named due to the sensitivity of the matter.
APCO, headquartered in Washington, is one of the world's largest public relations firms, and specialises in crisis management for its clients.
Many of its senior executives are former government officials and the firm is well known for its expertise in high-profile political and corporate cases, including the 2010 firing of Mark Hurd, the former chief executive of computer and electronics giant Hewlett-Packard.
The appointment of APCO comes after a badly managed media event organised by SHKP, as well as complaints from the investment market that it had failed to keep institutional investors updated about the course of the ICAC investigation.
On April 3 the Kwok brothers convened a hastily arranged media briefing that started more than 30 minutes late; representatives of more than 100 media organisations in attendance were told in advance not to ask any questions as the Kwok brothers only wanted to read prepared statements.
It is believed APCO will advise the Kwok brothers on media relations as well as try to put a positive spin on unfolding events throughout the course of the ICAC investigation.
The group's in-house public and investor relations teams will focus on other company- and stock-related matters.
'We're all human beings, so even a judge will have his own feelings,' said a veteran consultant at a rival public relations firm.
'And public opinion is important - in particular in a case like this.'
APCO made its reputation in Hong Kong as a government relations specialist after helping the Royal Hong Kong Yacht Club through a series of public relations campaigns to gain public support to retain the club's historic site.
Total market value, in Hong Kong dollars, of Sun Hung Kai Properties, the city's second-biggest developer