HONG KONG - TOP Hong Kong developer Sun Hung Kai Properties ousted its chairman, Walter Kwok, on Tuesday in a family feud that has rocked one of the city's best regarded blue-chip corporations.
Mr Kwok's departure after nearly two decades at the helm of the $42 billion property company caps weeks of sensational media coverage, with Mr Kwok accusing his brothers and fellow directors of having him diagnosed as bipolar, and reports of an extra-marital affair. The saga offered a rare behind-the-scenes glimpse into the occasional power struggles among Hong Kong's corporate glitterati.
Sun Hung Kai was named in a Euromoney poll as Hong Kong's best-managed firm in 2007.
Mr Kwok, 57, who took leave of absence on Feb 18, has accused his brothers Thomas and Raymond of trying to have him dismissed illegally, but a Hong Kong court on Monday rejected his bid to block a vote by the board.
The brothers' mother, 79-year-old Kwong Siu-hing, was named as chairwoman, Sun Hung Kai said on Tuesday.
Walter would be a non-executive director, a symbolic role with no real power.
A spokeswoman for Walter Kwok could not be reached for comment.
Sun Hung Kai shares climbed 1.3 per cent on Tuesday, following a 1.8 per cent gain on Monday, as the power struggle looked to be heading for a resolution, but the stock is still down more than 10 per cent this month, wiping over $4 billion off its market value.
Citigroup's Tony Tsang slapped a sell recommendation on Sun Hung Kai in a May 18 report, citing 'potential instability' of the firm's management as a factor that might lead to delays of key property projects later in the year.
The Kwok brothers were ranked Hong Kong's second wealthiest by Forbes magazine in January, with a combined fortune of $24 billion, behind Asia's richest self-made billionaire Li Ka-shing.
Waning star
Over the past four decades, Sun Hung Kai has built some of the city's most exclusive high-rises, including luxury hilltop apartment blocks and harbour-front skyscrapers.
Its International Commerce Centre, on the Kowloon peninsula, will become the world's third tallest tower when completed, Raymond Kwok said last year.
Walter Kwok filed a suit against his brothers this month to stop them firing him, arguing that any attempt to remove him would constitute a breach of agreement.
The tycoon added that he believed his brothers had proposed his dismissal because of health concerns, linked to a diagnosis of bipolar disorder that he was contesting.
Local media, however, have reported that the rift may have resulted from Walter's close friendship with a purported mistress who exerted an untoward influence on Kwok's running of the firm - one of the city's largest land owners and employers.
'In the past few days, some people have spread dishonest opinions to mislead shareholders over my mental state and of hindering the running of the company,' he said in a statement on Monday.
'These rumours have destroyed my own legitimate right to govern Sun Hung Kai.'
On Friday, the high court rejected Walter's application for an injunction, saying it was not a decision for the court, and on Monday again rejected an attempt by his lawyer to re-apply.
Mr Kwok expressed 'utter disappointment' with the decision.
Family disputes are rarely so acrimoniously aired in public in Hong Kong's tight-knit corporate community.
Another exception is a marathon dispute over the multi-billion dollar estate of Nina Wang, formerly Asia's richest woman and one of the city's most colourful tycoons, which has not yet been resolved. -- REUTERS
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