Tycoon arrests blacken Hong Kong’s clean transparency image
HONG KONG: A corruption case against Hong Kong’s two richest
property tycoons is a black mark on the city’s clean image and could
fuel public anger over links between government and business, analysts
said.
The Asian financial hub has been gripped by the arrest of billionaire
brothers Thomas and Raymond Kwok, co-chairmen of the city’s largest
property developer, as well as former senior government official Rafael
Hui.
The Kwoks have yet to be charged with any crime but anti-graft
investigators are believed to be focusing on alleged malpractices
involving the developers’ huge “land bank” of rural, undeveloped
property, analysts said.
The case has sent shockwaves through a city that has earned a
reputation as one of the world’s most open and transparent markets, even
as its growth has enriched a clique of tycoons who control everything
from ports to telecoms.
Lyncean Holdings managing director Francis Lun said the Kwok case
“reinforces the perception that there is collusion between the big
developers and the government”.
“This is a black eye for the civil service,” the financial adviser
told AFP.
The Kwoks are worth an estimated $18.3 billion and jointly chair the
Sun Hung Kai Properties group, builder of many of the tallest landmarks
in Hong Kong’s glittering skyline.
The brothers insist they have done nothing wrong and the company has
stood by them, but investors wiped almost $5 billion off Sun Hung Kai’s
market value the day after the arrests were made on March 29.“There is
limited disclosure on the corruption investigation, which poses a level
of uncertainty as to the impact on the company,” said ratings
agencyMoody’s, which like Standard & Poor’s has cut the firm’s outlook
to negative.
The Kwoks’ Sun Hung Kai, Li Ka-shing’s Cheung Kong Holdings, Cheng
Yu-tung’s New World Development and Lee Shau-kee’s Henderson Land
Development are popularly dubbed the “Big Four” developers in the city
of seven million people.
As their wealth from land sales and development grew in the 1970s and
1980s, they expanded into other sectors such as utilities, hotels,
telecommunications, supermarkets and restaurant chains.
“They control just about every profitable business in Hong Kong. They
collect ransom from the people of Hong Kong, basically,” Lun said.
Chinese University of Hong Kong political scientist Ma Ngok said the
tycoons “have their hands in almost every sector” and influenced
government policy to protect their interests.
“They are so dominant that if you try to do something to the housing
market it won’t be very meaningful,” he said, referring to property
prices that are among the highest in the world.
The Kwok arrests came days after a leadership vote in which a textile
tycoon’s son competed against a wealthy property consultant for the
approval of a 1,200-member election committee packed with tycoons and
their proxies. |