At a meeting delayed for a almost two weeks by a bitter court battle between Mr Kwok and his brothers, 16 of the 17 board members voted to demote the former chairman and chief executive to non-executive director and put his mother in the chair until the annual general meeting in December.

The duties of chief executive will be shared by younger brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, vice-chairmen and managing directors.

Shares in the company rose HK$1.10, or 0.87 per cent, to HK$126.80 yesterday, reversing a trend that has seen them tumble more than 9 per cent since May 2.

Analysts said the board should have appointed a permanent chairman and investors would doubt the ability of Madam Kwong to manage the property giant. Phillip Capital Management fund manager Li Kwok-suen called her a figurehead chairwoman.

Raymond Chan Siu-yeung, director of Baptist University masters programme in corporate governance and directorship. said the arrangement was improper.

'Investors will cast doubt on the 79-year-old mother's ability to handle the firm,' he said.

A source said Walter Kwok was not at the closed, hour-long meeting but that his mother was.

'After the board heard what Walter had done to hurt the company for the past year, all 16 members voted to terminate him [as chairman],' the source said.

In a letter to the board, the embattled elder brother - who, his younger brothers say, is mentally ill - insisted he was still a 'fit and proper person' to continue as chairman and said the move to oust him stemmed from a row over corporate governance standards.

After the meeting, he issued a statement saying that he 'categorically denies all and any allegations' against him and alleging conflict of interest.

'The board passed a resolution ... on superficial reasons, totally ignoring my hard work and contribution to the company during the past 18 years,' he said.

The company said in a statement to the stock exchange that Walter Kwok had been redesignated a non-executive director, with an annual fee of HK$100,000. As chairman, Mr Kwok was paid HK$2.06 million a year.

Madam Kwong, Sung Hung Kai's biggest shareholder, has never sat on a company board. The statement said, however, that she has more than 40 years of experience in the real estate business.

She will be paid a director's fee of HK$120,000 a year.

Yesterday's meeting was held a day after the Court of Appeal, in the final blow to Walter Kwok's legal fight to stop the board discussing his ousting, refused to grant an injunction blocking it from doing so.

In his letter to the board, Walter Kwok urged it to 'look into the irregularities and breaches of corporate governance standards that I have previously identified'.

Hitting back at allegations that he had behaved abnormally at meetings, he said all Sun Hung Kai Properties staff knew he had the 'more mellow temper' of the brothers.