Major investors have been selling large chunks of Sun Hung Kai Properties stock and investment banks have downgraded its shares following the arrest of its joint chairmen by the Independent Commission Against Corruption last Thursday. Charles Schwab Investment Management yesterday sold 200,000 shares of Sun Hung Kai Properties, chaired by Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen. This followed the selling of 439,000 shares by another asset management giant, Blackrock Fund Advisers, on March 30. Investment bank Goldman Sachs issued a research report on Monday suspending its rating on the stock, due to a lack of details about the investigation and uncertainty about how long it might take to resolve. At least four banks and brokerages, including Barclays, DBS Group Research, JPMorgan and Citigroup have now downgraded the stock. Ratings agency Standard & Poor's, which said the management's stability and reputation might be weakened by the arrests, placed the developer's A+ debt rating on negative credit watch. Louis Tse Ming-kwong, a director of VC Brokerage, said the recent ICAC investigation had tarnished the corporate image of the company. While some funds were investing on the basis of the future development of the company, it would be hard for Sun Hung Kai Properties to lure more long-term investors until the dust had settled, bankers said. As of December 31, 42.09 per cent of the Sun Hung Kai Properties shares are owned by the Kwok family under an HSBC Trustee. The top 10 shareholders of Sun Hung Kai Properties, apart from the Kwoks, are mainly international asset management companies, including Blackrock, Fidelity and State Street. Blackrock, Sun Hung Kai Properties' largest institutional investor, took the lead among other institutional investors by offloading its holdings in the developer last Friday, one day after the arrest of the joint chairmen. Blackrock sold 439,000 shares, according to Bloomberg data, trimming its holding in the developer to 0.83 per cent, from 0.85 per cent. It remains the biggest institutional investor, holding 21.82 million shares. Brokers said institutional investors were keen to sell Sun Hung Kai Properties stock because of the uncertainty hovering over its corporate governance. The share price of Sun Hung Kai Properties closed at HK$96.25 yesterday, up 1.96 per cent from Monday's trading. It has lost 13.4 per cent since it resumed trading on Friday. The stock did not see a rebound yesterday morning despite a Monday conference call between the company's investor relations officer and institutional investors with major banks who cover the stock. However its share price picked up in the afternoon trading session, rising to a high of HK$97.35 at 3.33pm after the company alerted the media at 1.53pm about the 3.30pm press conference to be held by its joint chairmen. However, Tse of VC Brokerage attributed yesterday's rebound in Sun Hung Kai Property's share price more to short-selling covering and warrant trade than a renewed appetite for the stock among either institutional or retail investors.