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Subscribe to RSSThomas and Raymond Kwok, two brothers who control Sun Kai Properties, the second largest property company in the world, were arrested by Hong Kong's Independent Commission Against Corruption Thursday, scandalizing the city. NBC's Ed Flanagan reports.
BEIJING – If you’ve ever been to Hong Kong, you’ve undoubtedly walked by a building built or managed by Sun Hung Kai Properties, the second largest property company in the world and one of the small number of prominent developers that control real estate in this land-scarce region.
To say that the Kwok family, which controls Sun Hung Kai, has played a part in constructing Hong Kong’s iconic skyline would be massive understatement. Three of the tallest buildings in the city were constructed by the firm as well as one of the region’s more surreal icons, a replica of Noah’s Ark which doubles as a hotel and theme park. (The Kwoks are evangelical Christians.)
So when news broke that the company’s co-chairmen, Thomas and Raymond Kwok, were arrested on Thursday by the Independent Commission Against Corruption (ICAC), it caused an uproar that has scandalized the city of 7 million and caused the firm’s stock to tumble.
Make that plummet.
In trading Friday on the Hong Kong Stock Exchange, Sun Hung Kai’s stock price plunged 13 percent, for a loss of $4.9 billion in market value.
It was easily the company’s worst loss on the market in 14 years, according to Bloomberg News.
Though no charges were publicly announced and the Kwok brothers were released late Thursday evening, their arrest at the same time as the reported detention of Rafael Hui, the number two in the Hong Kong government from 2005-2007, has some speculating that the arrests were related.
If so, the arrests one again underscore the tight relationship between Hong Kong’s government and local property developers, both of whom are in a perpetual race to keep up with the housing demands in the world’s most densely populated city.
Mercurial rise not without its issues
With estimated holdings of $18.3 billion, the Kwok family is the 27th wealthiest family in the world, according to Forbes Magazine. Their company, which was founded in 1963 by family patriarch, Kwok Tak Seng, has risen to prominence by breaking into every facet of the property business, from residential to hotels to industrial development.
Bobby Yip / Reuters
Thomas Kwok (R) and his younger brother Raymond Kwok, both Vice Chairman & Managing Director of Sun Hung Kai Properties, listen to a question during a news conference announcing the company's interim results in Hong Kong in this March 11, 2009 file photo.
By the end of 2011, Sun Hung Kai was reported to have a land bank of 46.7 million square feet of gross floor area either completed or in development. The group also owns 26 million square feet of farmland in Hong Kong’s New Territories that is in the process of receiving planning permission to be converted to building land.
That translates into an astounding amount of property under Sun Hung Kai’s control in a city where land is extremely precious.
The company and the family have also long been in the spotlight in Hong Kong. When the family patriarch died in 1990, he left the reins to his eldest son Walter, who became chairman and chief executive. In 1997, Walter was kidnapped and held for a week before his family paid a ransom of more than $77 million to have him released.
Walter returned to the company after his release, but eventually the family relationship unraveled when Thomas and Raymond Kwok dethroned Walter in 2008.
With the support of their mother, the two brothers charged Walter with being unfit to run the business and after a nasty struggle, eventually took over. Thomas, 60, runs the construction of new developments and Raymond, 58, is in charge of the company’s finances.
Are Hong Kong’s business and political interests too close?
The arrest of the Kwok brothers and Rafael Hui by the ICAC comes at a time when Hong Kong is dealing with a number of incidents that bring into question just how transparent and corruption-free the former British colony is today.
On the face of it, the city has a good reputation. The Heritage Foundation calls Hong Kong the world’s freest economy while Transparency International calls it the 12th least corrupt country and/or territory in the world. (The United States came out 10th and 24th respectively.)
But the relationship between real-estate developers and the government has long been a source of simmering tensions in the crowded city. Opposition leaders and some social groups have long criticized the cozy relationship between the government and the developers.
Thousands took to the streets in March to demand that the city’s Chief Executive Donald Tsang quit after he was was accused of accepting invitations for lavish yacht dinners and private jet trips from local businessmen.
In elections for the city’s next chief executive just last weekend, the winner Leung Chung-ying, campaigned on a platform of providing more low-income housing in the city.
Some argue that the Kwok scandal is the next in a storyline of business and government blurring together too closely. However, the fact that the ICAC went ahead with this investigation suggests that for the present time at least, the mechanisms in place to deter and uncover corruption are still strong in Hong Kong.
Where this investigation goes from here will go a long way towards determining whether this latest crisis of faith in Hong Kong is the next step in a gradual erosion of Hong Kong’s autonomy and financial freedom or one that rights it once and for all.
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What a kwok of crap. They should be ashamed.
Ah! Memories of Enron!
The Kwok's must have really pissed off the local politicans to have this come about so rapidly.
They should be hanged in public.
kwok em f-n evangelical crooks!? WWJD? they will be burning in hell soon anyway
Well, crooked money and crooked religion, evangelists, fit fine together - even in Hong Kong.
Nothing new under the sun.
So sick of MSN's terrible reporting.
Maybe if they would hire some actual reporters instead of jr spin doctors we could actually get NEWS here.
WTF were they arrested for? Seems kind of important to the story, don't you think?
What did they do? What are they accused of? WTF happened?
This story tells me basicaly nothing. Some rich land developers got arrested for....something. So did a former politician. They were arrested becuase people think they...did something or something. They are also very rich. They were in Hong Kong.
Great reporting! NOT!
The Heritage Foundation sucking up to big money interests, there's a surprise. I wonder how they feel about the Philippines, possibly the most unregulated, small government, competitive, no income tax, capitalistic nation on earth.
google...tom delay mariana islands...
Evangelicals....I guess all sins are forgiven if you donate some of your loots to the church.
Yeah them seeds work wonders for crooks...and they are about to take over all of the US government
The money and power in the hands of the few always leads to disaster. The US is no exception. The Elite are worldwide.
Wouldn't you love to read story after story like this about each REPUBLICAN Congressmen.
The Fosz-4254828,
It was more fun reading how the Democrats are robbing their own and others acts of STUPIDITY...
1. SACRAMENTO, Calif. – A longtime California Democratic campaign treasurer embezzled at least $7 million from as many as 50 clients including politicians, local officials and other political entities in a scheme that continued for more than 10 years, according to a new court filing by federal prosecutors.
2. ANNAPOLIS, Md. — Prince George’s County Executive Jack Johnson, whose second term expires next month, and his wife, Leslie, who was recently elected to the County Council, were charged with witness and evidence tampering and destruction, alteration and falsification of records in a federal investigation. FBI agents said they recorded the husband telling his wife to flush a $100,000 check from a real estate developer down the toilet and to stuff almost $80,000 in cash in her underwear.
3. Democratic Assemblywoman Mary Hayashi, 44, was arrested in October for stealing leather pants and other articles of clothing from Neiman Marcus in Union Square.
4. Etc, etc...
shocking, wealthy hands in the pockets of politians.
I think it is the other way around: politicians in the pockets of wealthy. But Hui is no "politicians". He has never win nor run any election. He's been a government employee all his life, except for a few brief spins in the private sector.
This will be interesting to see. Hong Kong is at the top of the business hubs of the world inspite of the fact it is part of Communist China. Our politiicans, including the current administration could learn something from Hong Kong. Business investment and opportunity for all fluorishes in Hong Kong. One major difference is that you will never see a government bailout there. You either sink or swim. President Obama needs to understand that crony capitalism is a failed policy.
Singing the praises of Hong Kong after reading this article makes a lot of sense.
Hong Kong invented crony capitalism. Their whole system is built on it.
Apparently, you've never been to Hong Kong. It's been the Wild West from the beginning. That's the good and bad news. There is serious corruption (as above), there are serious economic equality issues. It's not the cleanest place on earth, either (though it looks damned good next to China).
And now, China has learned just how powerful the HK Way is, and despite what this big bust looks like, this is business as usual throughout the region. If these guys were exerting too much political pressure, the big guys would have no problem in taking them down. The closer lower politicians and powerful business people who have grandiose expectations get to the top, the more likely they are to get knocked out. (See Bo's fate)
The good news is if you support business activities that are raw and entirely capitalistically driven, you'll love HK. I'm entirely sure, though, we don't really want that in the U.S. Just guessing...
If their stock is publicly traded, this is an excellent opportunity to run it into the ground and then buy all of it up. They didn't lose any value as far as their holdings go, so what is the big deal? Stock manipulation was probably invented before the first share was sold. If they become insolvent because of this, that would be news.
It is not capitalism that is bad but the corrupt people that exploit the system.
In China - embezzlement conducted with more than 100,000 yuan (US$ 12,353) is subject to no less than 10 years in prison or life imprisonment with property confiscated while those with particularly serious circumstances can be executed...
Reference - http://www.china.org.cn/english/government/140769.htm
I agree with this but the fact is that in washington, crony capitolism has no political affiliation favorites..If anything I think obama has done this less than any other politician..if your talking about solyndra or the auto industry. The only reason almost all republicans didnt vote for the bailout of walstreet or the auto industry is because they knew their would be enough votes to do this with democrats and got a ride on a no vote to save face with their base..otherwise they GOP would have voted for the bailouts. People dont reaslize the consequence for us losing our auto industry as its about the only manufacturing sector we have left in this country. I personally think it all stinks too myself and thats exactly why we need to now create laws that will make big business sink or swim now and bail nobody out from here on. Our president wanted and tried very hard to make them accountable and play by rules but GOP opposed it at every turn. They oppsed anything that would hold big biz to account and all politicians do is play us like idiots and we let them. After all the bailouts now they seek to squeeze the lifes blood out of us and the GOP support this and acvtually make it easier for them to do so. We need to get bacvk control from our govt from the big business that controls it or we are in store for some darker days to come..Repubs and dems are both taking part in this and just trading off blame back and forth. BUT, we cant ask our govt to do the right thing then basdh them for doing so...its insasnity..what the hell do the american people want? They got everyone confused..or most who dont actually do fact checking. Our prez hasnt done a bad job and at least has options to put on table other than squeeze the people repub plan. This is the first time in history that a party has opposed the people and denied them their president and thats just bullcrap, especially when they offer nothing or no options of their own except smaller govt and no consumer protections with privatization of taxpayer money at high risk with no oversight when all they do is pass ;laws that make them wealthy on the backs of the people they are suppose to serve..we all know right from wrong here. Enough people who watch our govt need to wake up and hold them all to accountability and realize that politicians know the game they are playing with us and our future as a country. We as the people of this country have to stop being divided and all come together and take our damn country and govt back from the greedy entities that want to enslave us financially and socially...once we realize this then we will continue to suffer as a nation. The GOP should have at least tried to govern and lead insteadf of saying no to everything they even supported just to make the prez look bad...Thats nor putting country first. Come on america, this aint rocket science,,,we are getting shafted because of pure ignorance by US not knowing rewal facts...
Wow- "dethroned" the old man, and now arrested for financial hanky-panky? So much for those old time evangelical christian beliefs. They seem more like ancient Romans to me...
Religion has nothing to do with morality. Only faith not religion can provide a moral foundation strong enough to exist in the human world.
Medic, can't see where evangelical christian beliefs are involved in any way with this story. Sounds like you've succumbed to the religious paranoia coming from the mouths of today's liberals. I'm not a religious guy. Just commenting on the latest liberal attempt to distract us from seeing the current failed administration and it's lackeys for what they are. You seem to have taken the bait big time.
Obama is doing a great job. America is fortunate to have such a wonderful president.
@Morlack, nice little sound bite, and the truth. But only if you define faith in the broadest terms, including non-religious beliefs of existence. Faith, particularly in the context you present, uses religious constructs to exist, itself. That presents a rather sticky circular argument.
But the truth on the ground is - and you know it - these guys were, no doubt whatsoever, "good Christians", the kind people want to look up to...and believe. The ties to morality, religion and take-no-prisoners business are inextricable; a web of power they, and many other so-called great business people, politicians religious figures for all time have understood how to leverage for personal gain.
This is what Medic400 is getting at, and is clearly something you can't argue.
LANAKAI RON, your using GOP talking lines ' this failed administration". So, if GOP controlled everything like in the previous 10 years before obama, whats would be different? i can answer that, there would be record number of poor people living on the streets and begging for help with none in sight. Jobs would come back in record numbers at minimum wage with no benefits. We would have smaller government for sure...one would wonder what we would need politicians for besides pass laws for their own special interests ( which is whats going on now). Looks like GOP want to take us back to the wild wild west gun slinging days with a one sheriff town. What do they feed people like you to get you to believe in self destruction? I'm amazed by such ignorance. The only thing that has failed is the GOP, by getting this country in the mess and leaving it solely up to the Dem's to fix while they sabotage any progress whatsoever. The GOP cant win by telling the truth about anything so now try to pass laws that take the very rights away from people that they claim liberals are doing when that's a crock. The GOP are more about rule over people than governing them and there is a difference...ask Hitler because they seem to be using his playbook by wanting to eliminate the poor, sick and elderly and empowering the rich scandalous thieves robbing the American dream for greed and control of power..why don't you try getting some basic facts about what you support and why. Im not saying any side is perfect and is far from it, but at least right now the Dem's are going to bat for the people of this country while the GOP do all in its power to keep us all enslaved and in debt to the corrupted greed of those who care nothing about anything but their own prosperity at any cost to the people. You guys were screaming freedoms being taken away because of a woman's health product being covered by insurance while your party is making it illegal to even vote in this country, stomping all over woman's rights,rigging elections. How is this helping you? Your party's objective is to keep you in as much debt as possible with no way out and sell your freedoms to the highest bidder...what do the GOP feed you? I know that they don't support any kind of education and people like you make that very clear everyday..no mind of your own and like to be led like the sheep yall are..liberals at least like to control their own destiny and make their own decisions based on actual facts. They are not spoon fed mindless ignorant idiots out for self destruction like the other half that "will rise again" rise to what? slavery? every man or woman for themselves? defund education, empower the rich off the backs of the poor, pick cotton for free labor? What did the south every have to offer its people other than poverty and slavery? this is what will "rise again? ITS A GOOD THING THAT WE HAVE PEOPLE IN THIS COUNTRY THAT ARE EDUCATED AND HAVE SELF RESPECT OR WE WOULD BE IN WORSE TROUBLE AS A NATION. The only big mistake was in 2010 midterms by electing GOP into office..those people had no idea what has in store for them and that's going to change this November..Some people don't like to to ruled in this country..so you just stay in your rebel state of mind and go nowhere.
Ray Kwok? Didn't he found McDonald's in Asia?
That was extraordinarily good. Best chuckle I've had today. Good job!
Agree, very funny!
I am so sure he "found" a McDonalds somewhere over there.
I don't see how he can miss it. There are several Macdonalds in buildings they own.
LMAO, im impressed five billion dollars can be lost in one day based on absolutely NO information. This is just more confirmation of what i have been suspecting for years, money does not possess any true value at all, and yet in spite of this fact people are willing to kill others for it even though humans, not money possess true value.
'Money' has no value.other than the commonly accepted societal fiction. Example, see how far (US) Confederate money will take you. As for humans having 'value', not even. Warfare, especially superstition (religion) based warfare demonstrates the lack of value as does life in various cultures.
What worth do poor folks without medical insurance have, in the US, when it comes to expensive medical treatment?
Welcome to Christianity china, The Kwok's are the worst kind also.... evangelical. You truly are turning to capitalism. good Lucking @!$%#.
But the lynch mob is already out. Take a deep breath and let justice proceed.
Easier for a camel to pass through the eye of a needle. . .
Never ceases to amaze me how the mighty fall.
How much money and wealth do you need?
Other than keeping theocracy at bay, I believe greed is a cancer we need to stomp out.
Don't worry. These brothers won't fall too far. May be couple of years in jail, and still keeps their trillions.
Corruption in Asia leading to super wealthy families??? Stop the presses, there is no way this has ever happened before....SHOCKING
The corrupt Asian's in China were all educated in the United States were it is practiced as an art form.
These are exceptional Asian corrupts. Most other have never seen the US.
I hope they go tits up and have to live in refrigerator boxes and run traplines catching rats to eat. Greedy pricks deserve it.
The bases of greed is taught by the parents of the children. If a child appears to be selfish and greed it is because they have not yet learn how to hid it yet. Just look at your average REPUBLICAN Congressmen.
The max penalty of this crime is 7 years in jail, and HK$500,000 in fine, which they spend on a night out.
What sad commentary on the value of money and peoples willingness to get/keep it at all costs, even the expense of family. On a lighter note, in the US we have xgov, xsenator, xwall st exec corzine allow billions to disappear under his watchful eye. Not so much as a slap on the wrist for him.
Sorry, can't feel bad about China. America first.
Rocco, I don't think this article was about feeling bad for anyone. It's news. You might want to get out of the house a bit more. Maybe visit someplace like China. You know, so you could see first-hand what it's like.
There's entire cities built in china that are ghost towns built by crooks such as these.
Crooks don't build ghost towns. Why waste money to builds something that no one buys ? Where is the money.
Ghost towns in China were invested by the PRC government, as recommended and executed by government officials, who need the GDP growth to stay in their jobs.
Crooks in China work with government officials, who confiscate land from poor peasants, sell the land to these crooks cheap, and pocket the proceed of land sales. The crooks build tofu buildings, lie about their quality and location and future, and sell the properties before they are started. The crooks then disappear after they collected the money, leaving the property owners with nothing except mortgages they owe the government banks which are happen to lend them the money, as part of their sales growth of the year, knowing full well the mortgaged properties are not to be built, period. The cheated property owners then complain to the officials who got the proceed from land sale of confiscated land. The government officials of cause file the complain and do nothing, and continue to find other land to confiscate. And in the mean time, the confiscated prime farmland became landfill or worse. The farmers became roaming migrant workers in another city, and the property owners had pay the mortgage payment to the government banks.
Where's the relevance that the "The Kwoks are evangelical Christians".
Only in America.
The rest of the modern industrialized world see religion it for what it is.
A bunch of BS.
business money and politics in bed together. the usual.
How would someone go about buying stock in Sun Hung Kai Properties?
Call any HK stock broker.
Corrupt billionaires? Who would have guessed? At least in the U.S.A. the billionaires guide the legislation so that keeps corruption is separated from any legal requirements, or criminal penalities, it is just another business situation to deal with.
What's Bo Bo got to do in this article, takanea??? Will his Muslim values save 3rd world America or insure we become part of it??? Really????
13% is not as bad as the title implied.
wish they would do it here, but no way, the greedy pucks that are involved would get a bail-out when the zhit gets tough.. the prob. with us iz to many white, greedy, people at the top that don't give a damm about the normal hard working guy. they will bury a marching band to get to were they are..
its all about the have's and the have not's---please don't let the GOP get in, or another war is on the horizen!!
go china!!
So you have forgotten the anti-trust cases against big oil, Microsoft and IBM ? Dig in to how AT&T and all be baby bells are formed, and how did the oil industry shaked up.
Obama must be behind this. Better create another watchdog group to see what he is up to.
people likely will find you more credible if you said Elvis was behind this
A watchdog group to look over the REPUBLICAN CONGRESS ? ? ? Never happen ! ! ! That would be like appointing someone to look after their own affairs... and, telling them what to tell the press.
Nixon is a good friend of Kuoks. Dick is behind this.