Legal battle fails to keep SHKP's Kwok brothers away from the office

Despite bribery charges, developer's core profits edge to a record with co-chairmen's investment and sales strategy still in place

PUBLISHED : Friday, 14 September, 2012, 12:00am
UPDATED : Friday, 14 September, 2012, 11:53am

The co-chairmen of Sun Hung Kai Properties, who have been charged with bribery-related offences, hint that they have no plans to step down temporarily despite being involved in a legal battle that could last for years.

The billionaire brothers, Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, reiterated that the company's investment and flat-selling strategy would remain unchanged.

"It is no secret that I come to the office every day, even on Saturday," Raymond Kwok said. "I work harder than before. It may be because I am invited less often for business entertainment."

In July, the pair and former chief secretary Rafael Hui Si-yan were charged by the Independent Commission Against Corruption with various counts, including conspiracy to offer advantages to a public servant and conspiracy to commit misconduct in a public office.

They were released on bail, and a court hearing will take place on October 12.

The Kwoks' remarks came after the developer reported core earnings edged up 0.93 per cent to HK$21.68 billion for the year to June, beating market forecasts of between HK$20.56 billion and HK$21 billion.

Analysts said the increase was small because it followed last year's record underlying profit of HK$21.47 billion.

Taking into account revaluation gains on investment properties, net profit fell 18.22 per cent to HK$22.07 billion. Revenue rose 9.35 per cent to HK$68.4 billion. A final dividend of HK$2.40 per share was declared.

Asked when the third generation of Kwoks will take a bigger role in SHKP's management, Thomas Kwok said he had "full confidence in the senior management, most of whom have worked for us since the time of my late father".

Adam Kwok Kai-fai, 29, the son of Thomas Kwok, and Edward Kwok Ho-lai, 31, the son of Raymond Kwok, have not appeared in public since they were appointed as alternate directors to their fathers in July as part of contingency plans for a worst-case scenario.

Thomas Kwok said he remained upbeat on the Hong Kong property market over the next 10 years. He said SHKP would speed up construction to support the government's call to increase housing supply.

The developer aims to sell HK$35 billion worth of properties in this financial year.

Thomas Kwok said he supported the new government's moves to increase the supply of subsidised and public rental housing. But he expressed reservations about cooling measures such as further cutting the mortgage loan-to-value ratio, saying it would suppress demand only in the short term and failed to address the root problem of supply.

Deputy managing director Victor Lui Ting said SHKP had generated about HK$4 billion from the sale of Kowloon Commerce Centre in Kowloon East.

SHKP shares rose 0.75 per cent to HK$107.10 on speculation the developer would recommend a special dividend to mark the 40th anniversary of its listing in Hong Kong, but none was proposed. "We have to reserve cash for future expansion," executive director and chief financial officer Patrick Chan said.