One of the biggest property tycoons in Hong Kong has been sentenced to five years in prison after being found guilty of corruption.
Third-gen Thomas Kwok, former co-chairman of Sun Hung Kai Properties, was found guilty on 16 December by Hong Kong’s High Court of conspiring to pay HK$8.5 million (€891, 380) to former Chief Secretary Rafael Hui in exchange for information on land sales.
In the highly publicised graft case, Kwok, 63, was also fined HK$500,000 but cleared of two other charges. He is appealing his conviction.
Hui, 66, who was preparing to take the number two government position of the territory’s chief secretary, was jailed for seven and a half years and ordered to pay a fine of HK$11.18 million.
Raymond Kwok, Thomas Kwok’s brother and co-chair of Sun Hung Kai Properties, was cleared of the four charges against him. He will remain the chairman of the company.
The Kwok brothers are estimated to be worth more than $13 billion (€10.6 billion at time of printing), ranking them among Asia's richest people.
In December last year their mother, Kwong Siu-hing, 84, widow of the business's founder, Kwok Tak-seng, gave a 6.36% stake in the company to each of the brothers. Kwong's eldest son Walter, was not given a stake. He was chairman of the company after the death of his father in 1990, but left the post in 2008 after his mother forcibly imposed a "leave of absence" on him.
Walter Kwok said in a statement that he had “no intention” of returning to the company. “I feel deeply sorrowful that Thomas was convicted,” Walter Kwok said. He wasn’t charged in the case.
Following the verdict Kwok resigned as chairman and managing director Sun Hung Kai Properties and was disqualified from becoming director of a company for five years. Subsequently his 31-year-old son, Adam Kwok, was appointed an executive director of the family firm.
In a statement on its website, Sun Hung Kai Properties said the normal daily business and operations of SHKP have not been affected by recent events and would not be affected by these changes.
Kwok has also stepped down from his role as an independent non-executive director at independent bank, Bank of East Asia.
Dr Winnie Peng, associate director of the Tanoto Center for Asian Family Business and Entrepreneurship Studies and HKUST, said that the impact on SHKP as a business would be minimal.
"In time of crisis, often families will work harder to support each member and unite. Corruption in any form is wrong and must be eliminated in our society," she added.
Two other men were also each found guilty of two conspiracy charges. Former Sun Hung Kai executive Thomas Chan was sentenced to six years in jail and fined HK$500,000, while another intermediary Francis Kwan was jailed for five years.
The investigation into the Kwok brothers, led byHong Kong’s Independent Commission Against Corruption, was made public in 2012 and has received much interest in Hong Kong.
The landmark trial has drawn attention to the close ties between the country’s most powerful businessmen and government officials.
Sun Hung Kai, which is one of Hong Kong's biggest developers with a market capitalisation of $42.7 billion, had its shares suspended from trade following news of the judgment.
Founded in 1963 by Kwok Tak Seng, the company employs over 37,000 people. The company posted revenues of HK$75.1 billion in the year to June 2014.