Firm Loses $4.9 Billion In One Day
( 4UMF NEWS ) Firm Loses $4.9 Billion In One Day:
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.
Story @ MSNBC
- Hong Kong corruption watchdog arrests Kwok brothers (business.inquirer.net)
- And So It Begins! (1oneday.wordpress.com)
- Tycoon brothers arrested in Hong Kong corruption probe (cnn.com)
- Sun Hung Kai executive arrested over suspected bribery (news.yahoo.com)