by winston » Wed May 28, 2008 1:52 pm
Hong Kong developer ousts chairman in family feud over company control
The Associated Press
Published: May 27, 2008
HONG KONG: One of Hong Kong's major developers ousted its chairman and chief executive on Tuesday following a legal feud between the three billionaire brothers who control the company.
Sun Hung Kai Properties' board announced in a statement that Walter Kwok will cease being chairman and CEO and serve instead as a non-executive director, effectively immediately.
Kwok's two younger brothers — Raymond and Thomas, both company vice chairmen — were appointed co-chief executives, the company said in a statement. His mother, Kwong Siu-hing, 79, was named the developer's new chairwoman, the company said.
The action came a day after Kwok lost an appeal in Hong Kong court for an injunction to stop the company's board from meeting and pressing ahead with his ouster.
Walter Kwok had sought the injunction as part of a lawsuit accusing his two younger brothers of plotting to remove him by portraying him as mentally ill.
Kwok issued a statement Tuesday denying all allegations made against him by "certain directors" on the board and said he would use his position to monitor the company in the interest of shareholders.
The day before, he had said he was willing to negotiate with his brothers.
"The three of us are brothers," he said. "Why should we torture each other?"
Sun Hung Kai said the board acted in the best interests of shareholders and that "business is being conducted as usual."
"The company will continue to follow the principle of collective leadership and will further strengthen its corporate governance, while striving for the best returns to shareholders," the developer said in a statement.
Kwok, 57, says he raised concerns about the terms of lease of a major new skyscraper in Hong Kong, the International Commerce Center, and questioned the company's apparent favoring of certain contractors and the high price of a piece of land the company bought.
He also says he proposed hiring an accounting firm to review management practices in the company — something his younger brothers opposed.
In response, Kwok claims his brothers arranged for a Stanford University doctor to visit Hong Kong and fed him misinformation that led the physician to diagnose Kwok with bipolar affective disorder. Kwok's brothers then pushed for his dismissal, he said.
Kwok's brothers have opposed the lawsuit and rejected his concerns about corporate governance.
Raymond Kwok said Friday the company maintained "a strict decision-making system" and that major investments and decisions were "discussed by management and decided by a majority consensus."
It's all about "how much you made when you were right" & "how little you lost when you were wrong"