Hong Kong (AsiaNews/Agencies) - Two billionaire brothers who run Sun Hung Kai Properties, a US$ 30 billion property giant, have been arrested on suspicion of bribery. As a result, the company lost 12.6 per cent of its value or US$ 5.8 billion, its biggest plunge in 14 years, but tried to reassure investors saying that nothing changes.
Thomas and Raymond Kwok, joint-chairmen and managing directors of Sun Hung Kai, were detained by the Independent Commission against Corruption ICAC) along with a former senior government official. Executive Director in charge of land acquisitions and project planning Thomas Chan Kui-Yuen was also arrested last week.
In announcing the arrests, the ICAC said that the company and some politicians in the former British crown colony were closely connected.
The arrests came four days after Leung Chun-ying was elected Hong Kong's chief executive. His predecessor Donald Tsang, who is still in office until Leung begins his mandate, is being probed for taking trips on the Kwok brothers' yachts and planes.
Sun Hung Kai Properties is Hong Kong's biggest property developer, the second in the world.
Set up as a family business, the company was listed on the city's stock exchange in 1972. Since then, it has grown rapidly.
"Just like their major competitors, Sun Hung Kai was in the right industry during the biggest housing demand boom in Hong Kong's history," said Eddie Hui, a professor in the Department of Building and Real Estate at the Hong Kong Polytechnic University. "They've rode on that momentum and have come a long way."
According to Savills Plc, Hong Kong has the most expensive real estate in the world. Home prices in the city have surged more than 70 per cent since early 2009 on record low mortgage rates and a lack of new supply.
Before the recent plunge in share values, the company's stock market value stood at more than US$ 30 billion. The scandal will inevitable affect shares.
Some analysts estimate that in the first 50 minutes following the announcement of the arrest, the two Kwok brothers and their mother lost US$ 1.8 billion.