HONG KONG - The chairman of one of the world's largest property firms lost a legal battle in Hong Kong against his brothers on Friday, the latest twist in a long-running feud that could result in his ouster.
A High Court judge turned down an application from Walter Kwok, chairman and chief executive of Sun Hung Kai Properties, for a permanent injunction order preventing the directors of the family-run firm from voting on his removal. Judge Susan Kwan said the court would not interfere with matters concerning internal company management.
'The directors have a duty to exercise their discretion and decide what is in the best interest of the company from time to time,' she said, adding it would be 'irrational and unjustified' for the court to interfere.
The feud at the firm, whose most famous building is Hong Kong's tallest skyscraper, the International Finance Centre Two, has been splashed across local media since February.
The rift is reportedly caused by Walter's involvement with a female friend whom it is alleged has become increasingly influential on the married tycoon and his firm.
The judge noted that the legal battle had created a lot of uncertainty about Sun Hung Kai, dragging down its share price and those of other developers.
Sun Hung Kai closed down 2.14 per cent at HK$123.50 (US$15.80) on Friday, and a number of other Hong Kong-listed property firms were more than 1 per cent lower.
Mr Kwok's barrister Ronny Tong said in court on Friday that his client would appeal against the ruling.
The two younger Kwok brothers, Thomas and Raymond, both vice-chairmen and managing directors of Sun Hung Kai, moved to reassure investors after the ruling that the court case would not affect the company's prospects.
'Since our father established Sun Hung Kai, we have experienced numerous ups and downs. But together our management and staff overcame the obstacles every time,' Thomas Kwok told reporters.
The legal battle between the Kwoks, reportedly the second richest family in the southern Chinese city, began after Walter Kwok filed a writ earlier in May - an hour before the company's board was due to meet to vote on his dismissal.
He said his brothers had tried to get a doctor to make a false assertion that he had a mental disorder. The court granted Mr Kwok an interim injunction order, which lasted until Friday's full hearing.
Mr Kwok also filed a writ on May 21 to sue his brothers for libel.
He argued they had falsely claimed in letters sent to Sun Hung Kai directors that he was mentally ill and had made unwise and undesirable decisions for the company without consulting them.
Media reports have said that Walter's octogenarian mother had ordered him to step down.
Sun Hung Kai made its fortune from investing in the southern Chinese city's property market, and in recent years has expanded its operations into the mainland. -- AFP
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