The chairman of Agile Property Holdings was arrested on suspicion of indecently assaulting a 28-year-old female employee at his luxury house in Happy Valley, the company said yesterday.
Agile stressed the incident "has not and will not affect the normal business and operations of the" Hong Kong-listed firm.
Chen Zhuolin, 50, was arrested on Thursday when he went to Wan Chai police station to answer inquiries over an alleged indecent assault at his home on Purves Road on July 10.
While the group's share price closed 4.61 per cent lower at HK$8.90 yesterday, analysts said Chen's arrest was unlikely to affect the group's ventures - especially its plan to bid for more land plots in Yunnan .
According to a police officer, the assault took place shortly before midnight on July 10 when Chen and the alleged victim held a reception for mainland clients at his house. After the clients left, she was asked to stay and sing karaoke with him. "The victim claimed she was molested while singing in a karaoke room and she was also taken to a bedroom where she was indecently assaulted," the police source said.
He said the victim did not report the attack that night. She discussed the alleged incident with colleagues before she went to Happy Valley police station and reported the case on July 14.
Chen was granted police bail but is required to report back next month. No charge has been laid.
While the family trust of Chen and his wife, Fion Luk Sin-fong, owned a 63.58 per cent stake in the company, analysts believe the incident is unlikely to lead to any big change in the companies' share structure or its ambition to develop tourism-related real estate on the mainland.
"The company has been listed for so long I don't believe any private conflict between Chen and his wife could alter the company's future direction," said an analyst from a Japan-based securities firm. But he expects the company's share price to be under pressure in the near future, as some fund managers are required to avoid investing in companies whose senior executives are under criminal investigation.
Chen and his wife co-founded the company 20 years ago. Agile Garden in Zhongshan , one of its early key projects, was a big hit and once made up 70 per cent of the city's total property sales. The company entered the Guangzhou market in 2002 and set a record by launching four property developments in one year. The company went public in Hong Kong in 2006.
Last year, Forbes ranked Chen and his family in 75th place on a list of China's 400 richest, with wealth of US$1.34 billion. In July, a local rich list published by Money Week magazine named Chen and his family the ninth richest in China.